2026 capital expenditures forecast raised to $205 billion: GOOGL technical outlook

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Alphabet drops 6.17% to $320.96 today

Highlights

Alphabet posted Q2 2026 revenue of $119.8 billion and EPS of $9.11, surpassing estimates, with Bloomberg attributing the EPS beat primarily to $99 billion in unrealized equity gains.
The company significantly raised its 2026 capital expenditure outlook to as much as $205 billion, portending further increases and negative free cash flow trends through 2027.
Technical signals are strongly bearish with price at $320.96, deep selling momentum, and an expected trading range of $308.47 to $342.78.

Capital spending surge fuels negative cash flow despite earnings beat

Alphabet reported second-quarter 2026 revenue of $119.8 billion and earnings per share of $9.11, both exceeding Wall Street expectations, though Bloomberg noted the EPS beat was largely due to $99 billion in unrealized equity investment gains rather than core operations. The company raised its 2026 capital expenditures forecast to as much as $205 billion and revealed further increases are expected in 2027, reflecting a sharp rise in investment requirements and resulting in negative free cash flow for the quarter. Google Cloud delivered substantial growth, with an 82% year-over-year revenue increase to $24.8 billion, while overall search revenue reached $63.3 billion. These operational highlights are overshadowed by the capital outlay and cash flow concerns detailed by Bloomberg.

Sustained downtrend as technicals and momentum favor sellers

Technically, GOOGL/USD is trading below its MA-20 and MA-50 on the 1-hour chart, with price also beneath the daily MA-200. The Ichimoku Kijun level at 350.7 marks immediate resistance. Momentum remains weak—MACD and ADX both indicate a sell bias, while RSI reads 31.74. Stoch RSI and CCI show deeply oversold levels, highlighting seller exhaustion. Bull/Bear Power favors sellers in intraday action, and the Awesome Oscillator aligns with the prevailing downtrend.

Rebound probability falls as price risk tilts lower in range

Looking forward, price is expected to remain within the $308.47 to $342.78 range over the next several sessions, consistent with recent volatility. The probability of a rebound is low, at just 24%, so further downside is more likely in the near term. The base case is for sideways movement within this band, but a break above the 350.7 resistance would signal a bullish reversal, while a drop below $308.47 could prompt a fresh wave of selling.

Anton Kharitonov, expert at Traders Union, notes that Alphabet’s aggressive capital expenditure and negative free cash flow overshadow its headline EPS beat and robust Google Cloud growth. He sees the technical setup as weak, with price trading under key moving averages and no signs of reversal yet. Base case is lateral movement between $308.47 and $342.78, with a low chance of short-term recovery. "Until Alphabet convincingly reclaims $350.7, I see downside risks dominating and would stay defensive on the stock."

Earlier, analysts noted that Alphabet’s rising capital expenditures for AI infrastructure were becoming a central concern and weighed on sentiment, despite ongoing strength in core business segments. With volatility persisting and technical signals aligning with a bearish outlook, traders should monitor for a potential break below the $308.47 support level as the next trigger for downside momentum.

Source of Data: GOOGL Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.