Google's major earnings night: Will it raise its Capex guidance? Senior analyst: May reach $200 billion in 2026.

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Alphabet, Google’s parent company, will announce its second quarter results after the US market closes on July 22 local time (early morning July 23 Beijing time). However, what the market really focuses on is not single-quarter profit, but whether the management will further raise guidance for AI capital expenditures (Capex).

Robert Castellano, president of The Information Network with over 40 years of technology industry research experience, wrote that multiple industry supply chain signals indicate Alphabet’s previously forecasted 2026 Capex of $180 billion to $190 billion may already be too conservative. With AI data center construction accelerating and cloud computing demand continuing to grow strongly, Alphabet’s investment in AI infrastructure is likely to remain on an upward trend over the coming years.

Castellano predicts that Alphabet may raise its 2026 Capex guidance in its earnings report to $190 billion to $200 billion, while keeping the statement that 2027’s expenditures will approach $300 billion unchanged.

Meanwhile, Deutsche Bank has also significantly raised its forecast for Alphabet’s future capital expenditures. According to a previous Wallstreetcn article, Deutsche Bank expects Alphabet’s Capex to reach about $325 billion in 2027, a clear increase from its previous forecast of $250 billion. Capital expenditures in 2028 may further rise to between $365 billion and $370 billion.

If this trend materializes, it means the AI infrastructure investment cycle continues to expand, and the market’s previous worries that AI Capex is about to peak and growth momentum will slow may need to be repriced.

AI Arms Race Heats Up: Five Tech Giants’ Capex May Break $770 Billion in 2026

The wave of AI infrastructure investment is entering a stage of larger-scale expansion, and the direction of Alphabet’s capital expenditures has market significance far beyond a single earnings report.

As hyperscale cloud providers continue ramping up data center, computing power, and energy infrastructure construction, capital investment is shifting from incremental growth to a long-term competition measured in tens of billions of dollars.

According to market data, total Capex of Alphabet, Amazon, Microsoft, Meta, and Oracle has surged from $271 billion in the past 12 months up to April 2025 to $482 billion in the 12 months up to April 2026. Based on each company’s current guidance and market expectations, the five giants’ full-year Capex in 2026 is expected to reach $745 billion to $775 billion, an increase of about 55% to 61% over the previous period.

This figure not only reflects the tech giants’ bet on AI commercialization prospects, but also means they are becoming the core driving force behind demand growth in the entire semiconductor supply chain.

Five Giants Dominate AI Infrastructure Investment Cycle

It’s important to note that over $770 billion in Capex will not all directly flow to chip vendors. It includes servers, networking devices, data center construction, land, power facilities, and energy supply systems, among other fields.

But from the supply chain perspective, every new AI data center drives simultaneous expansion across multiple segments. From high-performance computing chips, HBM memory, to advanced packaging, wafer manufacturing, testing equipment, and high-speed interconnect networks, AI infrastructure investment is creating a comprehensive supply chain pull effect.

The market’s core focus is that current AI industry demand is not driven by a single company, but jointly decided by a handful of hyperscale cloud providers. Their procurement pace for GPUs, custom ASICs, HBM, optical networks, and data center power systems is becoming a key indicator of the semiconductor cycle’s prosperity.

Therefore, whether Alphabet further raises Capex is not only a judgment on the Gemini model and Google Cloud business outlook, but also a validation of the next stage’s AI infrastructure demand intensity.

Meta Leases to Buffer, Google Orders Backstop—Two Paths for AI Capex

Recently Meta’s consideration of selling part of its AI infrastructure capacity to external clients sparked discussions about whether AI investment is becoming excessive. But from an industry logic viewpoint, this move is more about improving asset utilization than cutting investment.

According to revised forecasts from Wells Fargo, Meta’s push to externalize part of its AI infrastructure capacity is mainly due to a timing gap in releasing internal inference demand, hoping to realize asset returns earlier through leasing. This means Meta is commercializing already invested compute resources, not digesting excess capacity caused by insufficient demand.

In contrast, Alphabet has stronger internal absorption capability. Google Cloud’s currently backlogged contract amount has reached $462 billion, and enterprise customer demand for AI computing power and cloud services already provides strong order support. This means Alphabet’s new capital investments can be directly aligned with future revenue growth, and the commercial certainty of Capex expansion is higher.

Alphabet Earnings Become Key Window to Observe AI Cycle

For the market, the key to Alphabet’s second quarter results released on July 22 is not just earnings and revenue performance, but whether management will further raise its AI Capex expectations.

If Alphabet raises its 2026 Capex guidance, it will reinforce market judgments about the sustainability of the AI infrastructure investment cycle and provide new fundamental support for the chip, memory, advanced packaging, and data center supply chains.

If Capex falls short of expectations, the market may reassess the AI investment return cycle and exert short-term pressure on the valuations of related tech stocks.

As Microsoft, Meta, and Amazon subsequently release their earnings, Wall Street will further observe whether the AI infrastructure race is still accelerating, and whether capital investments worth hundreds of billions of dollars can continue to translate into revenue growth.

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