Google Delivers a Blowout Quarter—but Record AI Spending Steals the Spotlight

$GOOGL delivered one of the strongest quarters of the AI cycle, with Google Cloud revenue surging 82% and operating margin reaching 36% .
However, investors focused on several major spending concerns: another $15 billion increase in planned capex in just three months, expectations for an additional step-up in 2027, and temporary reliance on more expensive third-party computing capacity.
The spending surge pushed quarterly free cash flow into negative territory for the first time in more than 20 years .
Exceptional operating performance—but the market wants proof that AI revenue can keep pace with $GOOGL’s rapidly expanding infrastructure bill.