Alphabet shares fall after record $112.1 billion quarterly profit

Alphabet reported $112.1 billion in second-quarter net income, a result Fortune said may be the largest quarterly profit ever posted by a company. The stock fell anyway, as investors focused on a higher 2026 capital spending plan and limited detail on how that spending will turn into revenue, particularly from AI.

Fortune reported that the Google parent’s profit rose 298% from a year earlier in the quarter. Revenue climbed 24% to $119.8 billion, according to Fortune.

The results put Alphabet in rare territory for a public company: its quarterly profit crossed into 12 figures. Fortune described the total as a first for Alphabet and said it may be a first for any company.

Investors focused on spending plans

Alphabet shares dropped 1.46% at Wednesday’s close, then fell another 3.72% in overnight trading, according to Fortune. The selling followed new guidance from Chief Executive Sundar Pichai on expected capital expenditures for 2026.

Fortune reported that Alphabet now expects 2026 capex of $195 billion to $205 billion. The prior forecast was $180 billion to $190 billion.

That increase appeared to overshadow the earnings beat for some investors. Fortune reported that traders were caught off guard by the higher spending range and by the company’s lack of detail on how the investment would produce revenue.

The concern centered in part on artificial intelligence. Fortune reported that Alphabet did not offer a detailed explanation of how the planned spending would generate sales, especially as it relates to AI.

AI investment remains under scrutiny

Brian Mulberry of Zacks Investment Management told The Wall Street Journal that the $200 billion level had become a key threshold for investors. “The 200 was the do-not-cross line,” Mulberry told the Journal. “You can’t be offloading this much cash and not talk about it.”

The reaction reflects a broader test facing large technology companies as they pour money into AI infrastructure. Alphabet’s profit and revenue growth were strong by the figures reported by Fortune, but the share move showed investors wanted more information about the return on that spending.

Pichai’s updated guidance suggests Alphabet is prepared to spend more than previously planned in 2026. Fortune reported no further details from the company in the material cited on how the additional billions would be allocated or when investors should expect revenue tied to those investments.

For Alphabet, the quarter delivered both a record financial result and a sharper market debate over its investment plans. Fortune’s figures show the company is generating large profits now, while the stock move shows investors are pressing for a clearer link between future spending and future growth.

This story draws on original reporting from Fortune.