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Alphabet posts record profit, but AI spending drags free cash flow
About $77.1 billion of Alphabet's $112.1 billion quarterly profit came from investment gains, while free cash flow fell to -$5.9 billion amid higher AI capital spending.
Alphabet, the parent of Google, reported a record $112.1 billion profit for the three months ending in June, nearly four times the $28.2 billion profit it posted a year earlier, according to Yahoo Finance.
The company said roughly two-thirds of that profit, about $77.1 billion, came from gains on investments that had risen in value on paper rather than cash that was realized through sales.
At the same time, Alphabet recorded negative free cash flow of $5.9 billion, its first quarter in the red on that measure since going public, as spending on data centers, chips, and other AI infrastructure increased.
Alphabet also raised its outlook for 2026 capital projects to a range of $195 billion to $205 billion, lifting the midpoint by about $15 billion from its prior forecast, and Yahoo Finance reported that shares fell nearly 7% in Thursday trading as investors reacted to the higher spending plan.