Alphabet’s stock sinks after it bumps up AI infrastructure spending yet again
Google parent company Alphabet Inc. delivered better-than-expected revenue for the second quarter today, thanks to strong growth in its cloud business — but the stock sank in extended trading after it missed expectations on earnings and lifted its forecast for capital expenditures.
The company reported second-quarter earnings before certain costs such as stock compensation of $2.85 per share, trailing the $2.89 forecast by Wall Street analysts. However, revenue jumped by 24% in the quarter to $119.8 billion, surpassing the $116.93 billion target. Investors didn’t like what they saw, and Alphabet’s stock was down more than 2% in late trading.
In a conference call with analysts, Chief Executive Sundar Pichai (pictured) revealed that the company spent $44.9 billion on capital expenditures during the quarter, just ahead of the Street’s estimate of $44.8 billion. The company now expects capex for the year of $195 billion to $205 billion, up from the $180 billion to $190 billion forecast provided last quarter. Alphabet has been pouring money into artificial intelligence infrastructure to keep pace with booming demand.
