Alphabet Posts Record 82% Cloud Growth, But $205 Billion Capex Hike and Gemini Delays Send Stock Lower

Alphabet reported an 82% surge in Google Cloud revenue to $24.8 billion in Q2, beating expectations.

Shares fell about 3% after Alphabet hiked 2026 capital expenditure guidance to $195B–$205B, leading to its first-ever negative free cash flow of -$5.9 billion.

Delays to the Gemini 3.5 Pro launch have left Google trailing in AI coding tools, with analysts pressing CEO Sundar Pichai on competitiveness.

Google began recognizing revenue from direct sales of its TPU chips for the first time in Q2.

Adjusted profit per share of $2.85 slightly missed Wall Street's $2.89 projection.