Alphabet's quarterly earnings beat Wall Street estimates, but here's what is spooking investors

Alphabet reported quarterly revenue of $119.8 billion, beating estimates, though adjusted EPS of $2.85 slightly missed the $2.89 expected. The stock fell in extended trading after the company raised its 2026 capex guidance to $195-205 billion from $180-190 billion, and reported its first-ever negative quarterly free cash flow of $5.9 billion. Google Cloud revenue surged 82 percent year-on-year to $24.8 billion, but concerns over the AI spending race, amplified by comments from Warren Buffett and Ray Dalio, weighed on sentiment.