Alphabet expands 2026 capex forecast to $195-205 billion amid AI infrastructure push

Alphabet announced a significant expansion of expected full-year 2026 capital expenditures to between $195 billion and $205 billion during its July 22 second-quarter earnings report, up from prior guidance of $175 to $185 billion. The company reported negative free cash flow of $5.9 billion in the quarter as it races to scale AI infrastructure and secure computing capacity. Facing supply constraints in the chip market, Alphabet said it plans to expand the use of third-party capacity in Q3 as a bridging strategy, which will create modest margin pressure. The spending surge reflects intensifying investment demands as Alphabet scales for AI-driven opportunities across cloud computing and other business lines.

1. Alphabet raised 2026 full-year capex guidance to $195-205 billion from prior range of $175-185 billion
2. Q2 2026 net free cash flow was negative $5.9 billion
3. Company plans to expand use of third-party compute capacity in Q3 due to supply constraints
4. Third-party capacity expansion strategy expected to create modest margin pressure
5. Capex increase is primarily for scaling AI infrastructure and global compute capacity