Sundar Pichai Raised Alphabet's 2026 Capex Forecast to as Much as $205 Billion, Sending the Stock Down 7%. Was That an Overreaction That Investors Should Buy Into?
Alphabet was cash-flow negative in the second quarter due to its heavy spending on data centers.
Overview
Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) stock reached a new all-time high earlier this year on confidence in its broad tech platform and artificial intelligence (AI) advances. It even boasts a major investment from Berkshire Hathaway's Warren Buffett and Greg Abel, who have recently made it one of the conglomerate's largest equity positions.
However, the market's confidence was tested when Alphabet raised its outlook for capital expenditures this year after the second quarter. It now expects to spend $195 billion to $205 billion, up from an earlier estimate of $180 billion to $190 billion.
Details
Alphabet stock plunged after the report, which was otherwise quite impressive, and it's now 16% off its high. Is this a plunge to buy into?
Source
Originally published at www.fool.com.