Microsoft and Amazon will report results on July 29 and 30, respectively, offering a clearer read on Big Tech spending and cloud trends.
- GOOGL suffered its worst single-day drop on Thursday following its quarterly report.
- Alphabet said it would spend about $15 billion more in CapEx this year.
- The majority of retail traders said they are buying the dip in GOOGL stock, according to a Stocktwits poll.
Alphabet Inc.‘s stock rose 1.2% in premarket trading on Friday, recovering after its biggest one-day decline in more than a year.
The stock tumbled 7.2% on Thursday after Google said late Wednesday it would raise this year’s capital expenditure by an additional $15 billion, overshadowing an otherwise strong quarterly earnings report.
Retail Buys GOOGL’s Dip
Still, retail traders appear to show renewed enthusiasm for the stock. According to a Stocktwits poll, 57% of the 3,000 traders who voted said they are accumulating GOOGL shares on the dip. Eighteen percent said they are not investing, 14% said they are watching the move, and 11% said they are holding onto the positions they already have.
“Buying because the earnings growth and capex spending for the future is going to be the next leg of drivers,” a trader commented in the poll. “I think it’s already severely undervalued here and should be sitting at 450 right here today. Will be over 1k in the next 2 years.”
GOOGL stock is down about 20% from its peak in late May and is just 16% year-to-date. Meanwhile, investors are closely watching a rotation in the tech sector, with investors moving some funds from the red-hot chip stocks back into Big Tech companies.
Alphabet’s cloud peers, Microsoft and Amazon, will report quarterly results on July 29 and July 30, respectively, offering investors a clearer read on Big Tech capital spending and cloud demand – two key catalysts for the broader market.
GOOGL’s CapEx Update
Alphabet on Wednesday said its June quarter CapEx doubled from a year ago to $44.92 billion, bringing the investment so far in 2026 to $78.6 billion. The Search and cloud giant then updated its full-year CapEx guidance range to $195 billion to $205 billion, up from the previous estimate of $180 billion to $190 billion.
“The increase in the range is primarily due to an acceleration in the delivery of capacity to meet growing demand. As we previously shared, we continue to expect our CapEx to increase significantly in 2027 and will provide more details at a later date,” Alphabet CFO Anat Ashkenazi said on the earnings call.
As such, Alphabet reported negative free cash flow of $5.9 billion for the quarter, marking the first time the company posted negative quarterly free cash flow since going public in 2004.
Alphabet reported better-than-expected second-quarter sales and profit and a record 82% growth in its cloud unit.
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