Alphabet Raises 2025 CapEx, Highlights AI Growth

Alphabet Inc. reported strong second-quarter results, with revenue surpassing analyst expectations due to growth in search and cloud computing. The company raised its 2025 capital expenditures forecast by $10 billion to $85 billion, citing robust demand for AI and cloud services and a need to address supply constraints in infrastructure and chips. Google Cloud revenue and operating income exceeded forecasts, though a one-time $3.4 billion charge for hedging and severance impacted operating income. Alphabet's shares initially slipped after the report on concerns over higher spending, but later rebounded as investors recognized the strategic move to support AI expansion. CEO Sundar Pichai stated that AI is positively impacting all areas of Alphabet's business and is driving strong momentum. The company’s increased CapEx aligns with industry trends as rivals also scale AI investments.