Google parent company, Alphabet, has raised its capital expenditure guidance for 2026 to between US$ 195 billion and US$ 205 billion, up from a previous range of US$ 180 billion to US$ 190 billion, as it accelerates the delivery of capacity to meet demand for AI infrastructure.
During a Q2 2026 earnings call, Chief Financial Officer Anat Ashkenazi said Alphabet was raising its full-year 2026 capital expenditure (capex) guidance to meet demand. While the CFO didn’t specify what that demand is for, it’s most likely for data center capacity and hardware given the context of the prepared remarks.
The CFO stated that during the second quarter Alphabet’s capex was US$ 44.9 billion, with the vast majority of this spent on technical infrastructure. Ashkenazi said roughly 60 percent of that technical infrastructure spend was invested in servers and the remaining 40 percent in data centers and networking equipment. In June, Alphabet issued a combination of Class A stock and Class C stock and mandatory convertible preferred stock for US$ 49.6 billion, to be used for general corporate purposes, including capital expenditures to scale AI infrastructure and global compute.
Despite this adjusted capex guidance, Ashkenazi reminded analysts that the company continues to operate in an environment with supply constraints, just like the rest of the industry. However, Alphabet is better placed to navigate those constraints than most.
“We do have a benefit of having the full stack approach, so we’re able to drive operational efficiencies, technological efficiencies within our technical infrastructure organization so that we can deliver more compute. As long as we see these attractive opportunity to invest, we will continue to invest,” the CFO told an analyst from Morgan Stanley.
Google Cloud saw revenue increase 82 percent to US$ 24.8 billion driven by increased interest across enterprise AI solutions, enterprise AI infrastructure, and core services. At the same time, Google Cloud’s backlog has grown by more than US$ 50 billion since the first quarter, reaching US$ 514 billion by the end of June 2026, driven by demand for enterprise AI offerings.
Ashkenazi said the company will add just over half of the existing backlog to its revenue reports over the next 24 months. In the near term, Alphabet says it will expand use of third-party capacity in Q3 while it builds out internal capacity. This will put modest pressure on Google Cloud’s operating margins but will allow it to keep growing its customer base and unlock growth over the long term.