Google Stock Slides Again—Is Capex the Breaking Point?

TLDR

• Alphabet shares fell 3.5% in premarket trading, extending losses toward a third straight session.
• Quarterly revenue rose 24% to $119.8 billion, beating the $116.93 billion analyst estimate.
• Google Cloud recorded 82% growth, while its contracted backlog increased fivefold.
• Alphabet raised its 2026 capital expenditure forecast to between $195 billion and $205 billion.
• June-quarter capital spending reached $44.92 billion, nearly double the previous year’s level.

---

Google (GOOGL) stock fell 3.5% in Thursday premarket trading after Alphabet sharply raised its 2026 capital spending forecast. The decline put shares on course for a third straight losing session despite strong quarterly revenue and cloud growth. Retail traders remained bullish, while higher infrastructure spending overshadowed Alphabet’s expanding artificial intelligence business.

Alphabet Inc., GOOGL

Google Stock Faces Third Weekly Decline

Alphabet reported second-quarter revenue of $119.8 billion, representing 24% growth and exceeding the $116.93 billion analyst estimate. However, Google stock weakened after the company lifted full-year capital expenditure guidance to between $195 billion and $205 billion. The previous forecast ranged from $180 billion to $190 billion, reflecting faster investment in data centers and computing capacity.

The company spent $44.92 billion on capital projects during the June quarter, roughly double the amount recorded one year earlier. That spending produced negative free cash flow of $5.9 billion, the company’s first negative reading since its 2004 listing. Consequently, Google stock faced pressure as the market weighed current cash costs against revenue from artificial intelligence services.

Alphabet shares had already fallen nearly 3% across Tuesday and Wednesday before Thursday’s premarket move extended the decline. Class A shares closed Wednesday at $342.09, down 1.46%, before trading near $327.20 during early Thursday activity. The latest move left Google stock heading toward a third weekly decline as spending concerns remained the main market focus.

Cloud Growth Shows AI Demand

Google Cloud revenue grew 82%, while its contracted backlog increased fivefold and showed rising demand from enterprise customers. Morningstar said Alphabet showed “real progress in artificial intelligence monetization” across cloud, search, and other primary business segments. Still, Google stock remained lower because stronger operating results did not offset concerns about the enlarged investment program.

Chief Executive Sundar Pichai said Gemini reached 950 million monthly active users during the quarter. He added that Alphabet’s model interfaces processed 22 billion tokens each minute, up from more than 16 billion previously. Pichai also said Gemini Enterprise served 90% of Fortune 100 companies, supporting commercial adoption among large organizations.

Q2 was an amazing quarter, with our AI investments redefining what’s possible across every part of our business.

Alphabet revenue grew 24% YoY and Google Cloud accelerated to 82% growth. We saw exciting momentum across the board from Search to YouTube to the Gemini app (which… pic.twitter.com/n0ObklMtFR

— Sundar Pichai (@sundarpichai) July 22, 2026

 

Search revenue increased 17%, while Alphabet reported more than one billion monthly users for its AI Mode product. Benchmark partner Chetan Puttagunta said Google Cloud approached a $100 billion annual revenue rate and maintained growth above 80%. He said cloud revenue could approach search revenue within several years, although Google stock continued reflecting spending concerns.

Retail Traders Buy The Pullback

One trader linked the selloff to management’s discussion of currency pressures, capacity investments, and other cost headwinds. The trader also highlighted growth across search, cloud, artificial intelligence, YouTube, supercomputing, and Waymo’s autonomous driving operations.

Tesla Chief Executive Elon Musk called Alphabet’s results “impressive” in a brief X post after the company reported earnings. That supportive reaction contrasted with the market decline, while Google stock remained below several important short-term technical indicators. Shares traded under the 20-day, 50-day, and 100-day exponential moving averages during Thursday’s early premarket session.

Source: TradingView

The 200-day exponential moving average near $319.32 remained the broader support level shown on the chart. Meanwhile, the $345 area marked immediate resistance, while the $355 to $358 range presented a stronger recovery barrier. Google stock continued toward a third red day as retail buyers absorbed the dip and spending concerns dominated trading.