The $500 Billion Question: Can Google Cloud’s Massive AI Backlog Outrun Its Mind-Boggling CapEx Boom on Oct. 28?
CapEx rose 100 % to $44.92 billion last quarter, pushing free cash flow into a negative $5.86 billion for the first time. To cover the spend, Alphabet raised roughly $70 billion in equity and debt and halted buy‑backs.
Key points
- CapEx rose 100% to $44.92B, free cash flow negative $5.86B, Alphabet raised $70B equity/debt
- Cloud revenue 82% to $24.77B, operating margin 35.6% from 20.7%, shares fell 6.89% after earnings
In the third‑quarter earnings, total revenue hit $119.80 billion, a 24.2 % increase over the same period last year. Google Cloud revenue surged 82 % to $24.77 billion, and its operating margin expanded to 35.6 % from 20.7 %. The company’s EPS was $9.11, boosted by a $99.03 billion equity securities gain, but shares fell 6.89 % on the day of the report.
Sundar Pichai said the company remains “in a supply‑constrained environment” and expects more than half of the backlog to be converted within 24 months. The data suggest that while Google Cloud continues to grow rapidly, the capital intensity and cash‑flow pressure are forcing the parent to seek external financing.
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The $500 Billion Question: Can Google Cloud’s Massive AI Backlog Outrun Its Mind-Boggling CapEx Boom on Oct. 28?
finance.yahoo.com · 24 October 2026
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