Alphabet beats revenue forecasts but surprises with US$85 billion capex
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The news: Alphabet reported better-than-expected second-quarter revenue of USD96.4 billion ($146 billion), up 14% year-over-year, but seemed to unsettle investors with a surprise lift in capital spending.
The numbers: Shares, however fell as much as 2.8% in after hours trading after it said 2025 capital expenditures would be USD85 billion, or USD10 billion higher than expected.
Revenue excluding partner payouts was USD81.7 billion, compared with analysts’ projection of USD79.6 billion.
The context: The increased spending reflects Alphabet’s push to compete in artificial intelligence, with funds going toward data centres and AI model development.
The company and other tech giants have defended the rising AI investments amid slower-than-expected returns amid intensifying global competition, particularly from Chinese firms.
The sources: Alphabet, The Wall Street Journal , Bloomberg
