Alphabet once again raises capital spending guidance, accelerates AI data center layout, company's stock price drops after hours.

Alphabet Inc. has once again raised its already high capital expenditure forecast for 2026, indicating that spending may exceed $200 billion as the company accelerates the construction of the necessary computing power to support its artificial intelligence ambitions. The Google parent company expects capital expenditures in 2026 to range between $195 billion and $205 billion, higher than the previous highest guidance of $190 billion and higher than analysts' average expectations of about $186 billion. The revised guidance reflects the company's accelerated expansion of AI computing power and its efforts to gain more revenue from cloud computing customers. This outlook may further intensify investors' scrutiny of Alphabet's investments in artificial intelligence. Wall Street has been looking for evidence that the company's significant investments in the AI field are bringing new growth, rather than dragging down profits. As the first large U.S. tech company to report earnings for this quarter, Alphabet's performance will impact market expectations for the entire tech industry, which collectively has committed to investing billions of dollars in AI infrastructure. Alphabet's stock price fell 4% after hours on Wednesday. The stock closed at $342.09 per share in New York on Wednesday. The capital expenditure guidance overshadowed the company's otherwise solid performance in the second quarter. For the quarter ending June 30, cloud revenue was $24.77 billion, up 82% year-over-year, and higher than analysts' expectations of $22.46 billion. Cloud business backlog orders increased to $514 billion. CEO Sundar Pichai later said in a call with analysts on Wednesday that the cloud business performance "benefited from strong demand for AI infrastructure and AI solutions."