RESEARCH
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No. 147
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–$5.9 Billion
Alphabet’s free cash flow went negative for the first time in its public history. Not because the business is shrinking, but because it’s spending.
Jacob Radke
2 min read
Alphabet quarterly free cash flow from Q1 2003 through Q2 2026.
Source · Financial Modeling Prep, Yahoo Finance, and StockAnalysis
Q2 2026 free cash flow
−$5.9B
Alphabet’s first negative quarter.
Quarterly capital spending
$44.9B
Up 107% year over year.
Google Cloud growth
+82%
Revenue growth in Q2 2026.
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To follow up on my post a couple weeks back — “The Cash Flow Handoff.”
Alphabet’s free cash flow (what’s left after a company covers its operations and its capital spending) turned negative last quarter, −$5.9 billion, the first time in its public history.
Total revenue grew 24%, Google Cloud revenue grew 82%, Google Cloud’s order backlog reached $514 billion, and operating cash flow was still at $39 billion. What changed is capital spending, which doubled to $44.9 billion in a single quarter, with full-year guidance now trending toward $205 billion.
Investors sold the stock on the news, treating the spending as a risk, but Alphabet owns the full AI stack: its own chips, its own models, and the cloud that rents those models and chips out to businesses. It is investing that cash toward capacity it cannot build fast enough to meet demand, hence the $514 billion cloud order backlog.
Until next week,
Jacob
Sources & method
Free cash flow equals operating cash flow minus capital expenditures, reported quarterly.
Data source: Financial Modeling Prep quarterly cash-flow statement, cross-checked against Yahoo Finance and StockAnalysis.
Latest-quarter figures: operating cash flow $39.07 billion, capital expenditures $44.92 billion, and free cash flow −$5.86 billion.
Written by
Jacob Radke
Partner, Wealth Advisor
Jacob writes the weekly charts. Jacob leads the firm’s platform, including trading, research, portfolio systems and technology. He also sits on the firm’s board and investment committee, and advises client families.
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