Alphabet Inc. (GOOGL) shares closed at $343.54 on Wednesday, marking a 19% decline from the 52-week high of $408.61 reached on May 18. This drop is attributed to increased capital expenditure, which doubled to $44.9 billion in Q2 2026 as Alphabet invests heavily in AI infrastructure, resulting in negative free cash flow of $5.855 billion and a 20% decline to $53.3 billion in trailing 12-month free cash flow.
To finance these investments, Alphabet raised approximately $49.6 billion through equity offerings and has secured another $40 billion in an ATM program. The total debt has surged from about $16 billion a year ago to $100 billion. Despite a modest year-to-date share price increase of 10%, Alphabet faces stiff competition in cloud computing, with market shares of 28% for Amazon, 20% for Microsoft, and 15% for Alphabet, according to recent data.
In the cloud sector alone, revenues jumped 82% year-over-year to $24.8 billion in Q2 2026, backed by a substantial backlog of $514 billion. The Zacks Consensus Estimate for 2026 earnings is projected at $20.51 per share, indicating a significant year-over-year growth of 89.73%. Meanwhile, the forward price/earnings ratio for GOOGL stands at 20.26, slightly above the industry average.
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