Alphabet turns to outside capital as AI capex drives free cash flow negative
mkheck · x · 2026-07-23
- Alphabet reported negative free cash flow for the first time, as quarterly capex hit $44.9B against $39.1B in operating cash flow.
- The post argues that the headline EPS of $9.11 was inflated by $6.26/share in paper gains from Alphabet’s Anthropic stake, implying operating EPS was closer to $2.85.
- It also highlights a sharp balance-sheet shift: long-term debt more than doubled in six months, while buybacks fell to zero.
- The broader takeaway is that Alphabet is now financing AI infrastructure with outside capital — the post cites roughly $70B raised in equity and bonds in Q2 — because cash flow alone no longer covers the buildout.
Related event: Google Cloud Doubles in Q2 but AI Spending Turns Free Cash Flow Negative(60 posts)→
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