Hacker News

points by cs702 1 day ago | 0 comments

Impressive growth, and even more, ahem, impressive capital spending :-O

According to page 6, year to date in 2026, operations generated $127B in cash, and capital spending on property and equipment was $132B, so year to date, the business consumed $5B.

According to page 8, in the last quarter, operations generated $42B and capital spending was $51B, so over the past three months, the business consumed $9B.

Those figures don't include any capital spending made through off-balance sheet arrangements. No idea what those might be, or for how much Alphabet could be on the hook.

I'm curious to see if all that money invested in infrastructure will pay off. I hope it pays off, for everyone's sake, but hope is not certainty.

[–] mirekrusin 1 day ago

Why their shares tanked 10% then?

[–] treis 1 day ago

It's a tale of two AIs for Google. Cloud doubled revenue and tripled profit, probably based off serving models. So good for Cloud.

Search increased revenue and profit which is good. Means that LLMs are not yet stealing revenue. But also bad because the massive spend on infrastructure doesn't look like it's going to come back as increased revenue.

[–] mirekrusin 1 day ago

Out of all companies, with their own TPUs and native large scale computing... "habitat" they exist in – they probably know how to spend it well.

[–] Anon1096 1 day ago

People on the internet really overrate google's TPU advantage. OAI and Anthropic and others have been using TPUs as well for a long time now too. And they've also hired lots and lots of talent from the rest of FAANG, hyperscale compute talent and knowledge is also well distributed through all the top AI companies at this point.

[–] ismailmaj 1 day ago

They control the supply chain though, so they can't be price-gouged by Nvidia

[–] UncleOxidant 1 day ago

Pretty sure it's this part:

> generating $127B in cash, and capital spending on property and equipment was $132B, so the business consumed $5B.

[–] mirekrusin 1 day ago

well, they don't burn it like anthropic on rent, they spend it on their own TPUs, right?

[–] mono442 1 day ago

There's no guarantee it'll generate big enough returns and it's probably at jacked up prices.

[–] utopcell 1 day ago

not sure why you're getting downvoted, this is pretty much the reason.

[–] rubiquity 1 day ago

First signs that Search revenue might be peaking.

[–] anukin 1 day ago

They need to do layoffs and it will pop by 20%

[–] hiddencost 1 day ago

It's about expectations. They missed expectations on earnings, meaning they're less valuable than people thought.

[–] paulpauper 1 day ago

because missed estiamtes https://finance.yahoo.com/technology/article/google-stock-pl...

[–] paulpauper 1 day ago

The buildout is out of control lol

[–] maerF0x0 1 day ago

sell shovels

[–] HDThoreaun 1 day ago

Google is selling shovels. They spent $131 billion to produce shovels so far this year

[–] syrgian 18 hours ago

I would say Google is buying shovels and selling shoveling services.

[–] maerF0x0 16 hours ago

the analogy is falling apart.

I meant Datacenter real estate, construction companies, building materials. :)

[–] paxy 1 day ago

It's wild how quickly the tide turned from big tech companies having hundreds of billions in cash reserves and not knowing what to do with it to now taking on hundreds of billions in debt for questionable infrastructure buildouts.

[–] eitally 1 day ago

At least in the case of Google, the pace of their buildout is very nearly being matched by the growth of Cloud consumption (and related contracts with companies like Anthropic & OAI). Cloud had >100% y/y growth this quarter to >$30b rev. That's insane, and it's quite profitable. But consumption revenue is always a lagging indicator of capital investment, and it just so happens that this business cycle is demanding a scale of capex heretofore unimaginable. Institutional investors seem to have been happier with business as usual (big annual stock buy-backs, predictable cloud/ads/youtube growth in the high-20% range, EPS in the $5-9/share/qtr range, and an enormous pile of cash). This is the first time since 2004 where buying GOOG really feels like placing a bet rather than buying a blue-chip. To that point, this is also why GOOG has been treated like an AI company for the past 18mo or so, rather than a media & infrastructure company, and what justified the dramatic increase in it's P/E.

Taking a longer view, I have confidence things will work out well and this dip is a great buying opportunity, but I can also understand why the market several reasons to be skittish.

[–] gradus_ad 1 day ago

Ironically their massive cash reserves created an environment where the cost of AI infrastructure could be bid up so much to consume those very cash reserves.

[–] bethekidyouwant 1 day ago

It’s never irony

[–] vessenes 1 day ago

I mean, it will pay off for society one way or the other — we’ll have the datacenters and (hopefully) the weights at the end of this.

That’s an amazing amount of revenue and spend, though. Wild.