{"id":546184,"date":"2026-06-21T04:09:14","date_gmt":"2026-06-21T04:09:14","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/546184\/"},"modified":"2026-06-21T04:09:14","modified_gmt":"2026-06-21T04:09:14","slug":"this-metric-from-google-cloud-proves-its-185-billion-in-capital-spending-this-year-is-worth-it","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/546184\/","title":{"rendered":"This Metric From Google Cloud Proves Its $185 Billion in Capital Spending This Year Is Worth It"},"content":{"rendered":"\n

It’s no secret that Alphabet<\/strong> (NASDAQ: GOOG) (NASDAQ: GOOGL) is spending big in the artificial intelligence (AI) arms race. At the start of the year, it told investors it would spend from $175 billion to $185 billion on capital expenditures in 2026, primarily on data center construction. Since then, management has bumped that range to $180 billion to $190 billion. Those are mind-boggling figures, and the knee-jerk reaction among investors may be that the company is spending far too much.<\/p>\n

However, I think that’s the wrong way to look at it. There’s one metric I’ve got my eye on that shows that this spending is logical, and indicates that the return on investment could make it all worth it.<\/p>\n

Missed Nvidia in 2009? This Rare Signal Is Flashing Again.<\/strong>\u00a0In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia.\u00a0For the first time in years, that same “Total Conviction” signal is flashing for a company 1\/100th the size of Nvidia.\u00a0Continue \u00bb<\/strong><\/a><\/p>\n

\"Technician Image source: Getty Images. Google Cloud’s growth is exploding <\/p>\n

The data centers that Google is constructing are being used for two primary purposes. The first is for Alphabet’s internal needs, but that’s not nearly as large as the cloud computing opportunity.<\/p>\n

Alphabet isn’t the only one hungry for AI compute; a wide array of outside customers are also using its infrastructure to run their AI workloads. These Google Cloud customers<\/a> are paying for their computing usage every time someone utilizes their AI models. This provides a massive recurring revenue stream for Alphabet, and investors are already seeing the results of its heavy capex spending.<\/p>\n

In the first quarter, Google Cloud’s revenue rose an impressive 63% year over year. Any company that can grow a business segment that quickly is likely to get a free pass from investors to pour endless resources into sustaining that growth rate.<\/p>\n

Furthermore, these aren’t just one-time revenues. Because cloud computing is a usage-based system, if Google Cloud’s clients want to maintain access to the computing power, they must continue paying Google. Since Alphabet already has many customers lined up for the new computing power it’s bringing online, those huge capital expenditures will result in years of strong revenue growth for the company.<\/p>\n

But it isn’t done yet. While 2026 has been a record-setting year for capital expenditures for many tech companies, Alphabet told investors during its Q1 conference call that in 2027, it will once again increase its capex significantly. That shows that there’s still a major gap between supply and demand for computing power, and this could propel Google Cloud to become one of Alphabet’s largest segments.<\/p>\n

Given that Google Cloud’s revenue stream looks to be a bit more stable than its advertising business (where sales are often affected by the macroeconomic outlook), it should be a welcome change for investors. Although Alphabet has been laying out an enormous amount on data center infrastructure over the past few years (and looks likely to keep doing so), the growth rate of the cloud business speaks for itself. I think that makes Alphabet a strong stock to consider among the AI hyperscalers<\/a>.<\/p>\n

Should you buy stock in Alphabet right now? <\/p>\n

Before you buy stock in Alphabet, consider this:<\/p>\n

The Motley Fool Stock Advisor analyst team just identified what they believe are the\u00a010 best stocks<\/a><\/strong> for investors to buy now\u2026 and Alphabet wasn\u2019t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.<\/p>\n

Consider when Netflix<\/strong> made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation,\u00a0you\u2019d have $417,305<\/strong>!* Or when Nvidia<\/strong> made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you\u2019d have $1,293,148<\/strong>!*<\/p>\n

Now, it\u2019s worth noting\u00a0Stock Advisor\u2019s total average return is 936% \u2014 a market-crushing outperformance compared to 209% for the S&P 500.\u00a0Don’t miss the latest top 10 list, available with\u00a0Stock Advisor, and join an investing community built by individual investors for individual investors.<\/strong><\/p>\n

See the 10 stocks \u00bb<\/strong><\/a><\/p>\n

*Stock Advisor returns as of June 20, 2026. <\/p>\n

Keithen Drury<\/a> has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy<\/a>.<\/p>\n

This Metric From Google Cloud Proves Its $185 Billion in Capital Spending This Year Is Worth It<\/a> was originally published by The Motley Fool<\/p>\n","protected":false},"excerpt":{"rendered":"It’s no secret that Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is spending big in the artificial intelligence (AI) arms…\n","protected":false},"author":2,"featured_media":546185,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[261],"tags":[291,4186,289,290,109207,2078,18,4830,19,17,234166,82],"class_list":["post-546184","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alphabet","tag-artificial-intelligence","tag-artificialintelligence","tag-capital-expenditures","tag-computing-power","tag-eire","tag-google-cloud","tag-ie","tag-ireland","tag-revenue-stream","tag-technology"],"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/546184","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=546184"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/546184\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/546185"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=546184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=546184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=546184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}