Alphabet Posts First Negative Free Cash Flow as AI Spending Surges
Alphabet reported Q2 revenue up 24% to $119.8B but recorded its first negative free cash flow of -$5.9B due to massive AI infrastructure investments of $45B. The company raised its annual AI spending forecast to $195-205B, up from $10B.
Alphabet's second-quarter revenue rose 24% year-over-year to $119.8 billion, driven by continued growth across its core businesses. However, the company reported a negative free cash flow of -$5.9 billion for the first time in its public history, as heavy capital expenditures on artificial intelligence infrastructure weighed on cash generation.
The company spent $45 billion in the quarter, with 60% allocated to servers and the remaining 40% to data centers. Alphabet has sharply raised its annual AI spending forecast to between $195 billion and $205 billion, up from a previous estimate of $10 billion. Following the July 22 earnings release, shares of Google parent Alphabet (GOOG) fell 4.28% in after-hours trading.
Source: ForkLog