Alphabet Inc. said demand for artificial intelligence products boosted quarterly sales, and now requires an extreme increase in capital spending — heightening pressure on the company to justify the cost of keeping up in the AI race.

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Alphabet is growing fast in core and cloud segments, though rising AI capex is pressuring free cash flow and returns. Learn why GOOGL stock is a buy.

The company increased that figure on Wednesday to $85 billion, saying it was raising it due to “strong and growing demand for our Cloud products and services.” The company expects to further increase capital expenditures in 2026, Alphabet finance chief Anat Ashkenazi said on an earnings call.

Alphabet shares rose more than 3% in early trading on Thursday as the Google parent's earnings underscored a key message to investors: AI spending is climbing, but so are the returns.

Most leaders in the tech industry owe their wealth to founding equity stakes in their platforms, which Google’s Sundar Pichai does not have.

Alphabet Inc.'s $85B AI capex is backed by a $106B cloud backlog, showcasing tangible ROI. Click for my updated look at GOOGL stock post Q2 earnings.

AI upstarts were supposed to lay siege to Google’s search-engine dominance. So far, the defense is winning, writes Asa Fitch, following second-quarter results from parent company Alphabet. A: Google’s

Google’s parent company, which is facing aggressive competition in its core search business from A.I. chatbots, also posted a double-digit profit increase.

We’ll continue investing in the people, talent and compute needed to make sure that we are set up for the opportunity ahead,” said CEO Sundar Pichai.

Though Google Cloud is dominating headlines for its surprising outperformance, Alphabet’s core ad business remains robust. Google Search brought in revenue of $54.19 billion for the quarter, growing 12% year over year, while YouTube Ads revenue jumped 13% to $9.8.