The market is witnessing a brutal show me moment for Big Tech. While Google's latest earnings delivered top line growth, it has been overshadowed by a massive looming figure : The 2026 Capital Expenditure.
Google's earnings report showed that it is benefiting from its long term AI integration. However the cost is substantial.
The Harvest: Google Cloud increased 48% as AI workloads grew. It also decreased Gemini's serving costs by 78%, showing that efficiency is improving as demand rises.
The Bill: Capex of USD 175 B to USD 185 billion , almost double its 2025 spending.
The reaction : The stock fell. Investors are concerned that Alphabet is spending too much in infrastructure.
Amazon is facing a similar problem to Alphabet - spending too much on Capex. It must show how it can monetise its capex.
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