Alphabet Beats Q2 Earnings but Raises Capex to $195-205B, Sparks 4% After-Hours Drop

According to BlockBeats, on July 23, Alphabet exceeded Q2 earnings expectations with EPS of $9.11 versus expected $2.88 and revenue of $11.98 billion versus expected $11.651 billion. However, the company triggered investor concerns by raising its full-year 2026 capital expenditure guidance to $195-205 billion from the prior $180-190 billion range. This upward revision, attributed to accelerating capacity delivery to meet demand for AI infrastructure, led to a 4.24% after-hours decline, with shares dropping to $327.40. Management indicated approximately 60% of capex will fund servers and 40% data center and network equipment. The company expects near-term margin pressure from third-party capacity use in Q3 and noted that TPU system revenue recognition will largely shift to 2027.
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