Will Google's $200 Billion AI Bet Pay Off? History Says It Will.
Alphabet increased its capital expenditure target to roughly $200 billion. That's making Wall Street nervous, but long-term investors should take advantage.
Overview
Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) reported blowout second-quarter results, yet the stock fell after its July 22 report.
The culprit for the sell-off was likely the large increase in Alphabet's capital expenditures to build out artificial intelligence infrastructure. Management raised its 2026 spending target to $195 billion to $205 billion, up from prior guidance of $180 billion to $190 billion.
Details
Alphabet's free cash flow had already turned negative to ($5.9 billion) in the second quarter, the first negative free cash flow quarter in the company's history. With the increased spending guidance, Alphabet's free cash flow will likely remain negative for the year.
Source
Originally published at www.fool.com.