Alphabet's Cash Flow Dives into Negative Territory Amid AI Spending Boom
Alphabet Inc.'s (NASDAQ:GOOGL) cash flow turned negative for the first time since its public debut in 2004, driven by a significant increase in AI-related capital spending. The company's second-quarter capital expenditure hit $44.9 billion, doubling year-over-year and accounting for 63% of operating cash flow.
Despite this, Alphabet raised its full-year forecast to a range of $195 billion to $205 billion, up from $180 billion to $190 billion guided in the first quarter. The company's CFO, Anat Ashkenazi, mentioned that 2027 spending could rise significantly again, with approximately 60% of infrastructure investment going towards servers and 40% toward data centers and networking equipment.
Alphabet also reported negative free cash flow of around $5.9 billion in the second quarter, but maintained a positive trailing 12-month figure of roughly $53 billion. The company repurchased no stock in either of the first two quarters of 2026.