Sell-Side Warning: Google’s AI Capital Expenditure Set to Hit a New High, Projected to Reach $250 Billion by 2027

As Alphabet, Google’s parent company, prepares to release its second-quarter financial results after today’s U.S. stock market close, sell-side Wall Street analysts have issued a cautious consensus forecast for its future capital expenditure (Capex) trajectory. According to aggregated market data, analysts’ consensus forecast for Alphabet’s full-year 2026 Capex is roughly $186 billion, which aligns closely with the company’s previously raised official guidance range of $180–190 billion. This figure represents more than a five-fold increase from the $32.3 billion recorded in 2023, with funds earmarked primarily for AI data centers and computing infrastructure to support the ongoing expansion of Google Cloud and the Gemini model. Of greater note is the 2027 outlook. Morgan Stanley analyst Brian Nowak previously projected publicly that Alphabet’s Capex could jump further to roughly $250 billion next year. This aligns with remarks made by Alphabet CFO Anat Ashkenazi during multiple earnings calls, where she explicitly told investors that 2027 Capex would “increase significantly” compared to 2026. Market observers note that the surging Capex has put pressure on the company’s free cash flow (Q1 free cash flow fell approximately 47% year-over-year). During tonight’s earnings call, in addition to focusing on revenue and EPS performance, whether management will further raise its 2026 guidance and provide more specific details on 2027 spending levels will be key variables affecting stock price movements.