Alphabet Confirms Big 2027 Capex Hike, 2026 Budget Unchanged
GOOG is trading near its 52-week low of $267.17 (7.9% above the low) on elevated volume (1.9× avg).
Summary
CFO said on the Q3 call that a significant increase to 2027 capex is still expected, while the 2026 capex forecast stays unchanged. That keeps the AI infrastructure spending ramp intact even as Q3 free cash flow went negative on capex and operating cash flow took a hit from building TPU system inventory. Management also said TPU system sales were a meaningful contributor to Google Cloud growth and that just over 55% of the total backlog will be recognized as revenue over the next 24 months. Near-term margins face headwinds as the company starts using third-party cloud capacity, and ads in AI Mode are expanding into international markets. The capex signal matters most: it locks in another year of heavy spending and continued cash flow pressure.
At the time of this announcement, GOOG was trading at $288.37 on NASDAQ in the Technology sector, with a market capitalization of approximately $4T. The 52-week trading range was $267.17 to $404.47. This news item was assessed with neutral market sentiment and an importance score of 7 out of 10. Source: Reuters.