Google raises investment capital to $85 billion.

VHO - On July 23, Alphabet, Google's parent company, unexpectedly raised its capital spending plan for this year to approximately $85 billion, citing the strong demand for cloud computing. The company also predicted that it will continue to increase spending next year.

Google's parent company unexpectedly raised its capital spending plan for this year to approximately $85 billion.

Alphabet accelerates investment in cloud computing.

Alphabet's second-quarter earnings report showed it exceeded Wall Street's expectations thanks to new artificial intelligence (AI) features and a stable digital advertising market. "With increasing demand for cloud products and services, we are accelerating our investment in capital expenditures," said CEO Sundar Pichai.

Alphabet's stock has risen more than 18% since the last quarter. Following the earnings report, the stock initially declined slightly in after-hours trading but quickly recovered as management shared more information about strong demand for its cloud services.

However, the spending increase plan still came as a surprise. “I don’t think anyone anticipated the change in capital spending forecasts for 2025. Google had a great quarter, but it was overshadowed by the plan to raise an additional $10 billion in investment,” said Dave Wagner, chief investment officer at Aptus Capital Advisors.

Chief Financial Officer Anat Ashkenazi confirmed that capital spending will continue to increase in 2026, driven by strong demand and growth opportunities. Despite improved server deployment speeds, Alphabet is still not meeting customer demand.

Previously, Google projected spending around $75 billion on capital investments this year – part of the more than $320 billion that Big Tech companies are pouring into AI.

The AI ​​boom is driving demand for cloud computing, helping Google Cloud expand its market share, although it still lags behind Amazon and Microsoft. Thanks to its self-developed TPU chip and comprehensive AI portfolio, Google Cloud's customer base increased by 28% in the past quarter.

Notably, OpenAI recently added Google Cloud to its list of infrastructure partners, a surprising move given that the two are rivals in the AI ​​field, indicating a trend toward diversifying its infrastructure to avoid dependence on Microsoft.

However, experts warn that large capital expenditures could impact short-term profit margins, even though Alphabet insists that strong investment is necessary to maintain its competitive edge and investor confidence.

AI Race

AI features like AI Overviews and AI Mode are helping Google Search increase engagement, amidst pressure from chatbots like ChatGPT. AI Mode attracted 100 million monthly active users in just two months after its launch. Meanwhile, Gemini currently has over 450 million monthly active users.

The advertising segment, which accounts for about three-quarters of total revenue, grew 10.4% in the second quarter, reaching $71.34 billion, exceeding LSEG's forecast of $69.47 billion. "Hopefully, this result will alleviate concerns that ChatGPT could impact Google's search engine growth," commented Dan Morgan, portfolio manager at Synovus Trust.

Alphabet's total revenue in the second quarter reached $96.43 billion, exceeding the forecast of $94 billion. Earnings reached $2.31 per share, surpassing the expectation of $2.18 per share.

Source: https://baovanhoa.vn/nhip-song-so/google-tang-von-dau-tu-len-85-ti-usd-155596.html