Q1 2026 revenue reached $109.9 billion, up 22% year over year, and EPS of $5.11 exceeded the $2.63 consensus. Google Cloud backlog nearly doubled to $462 billion. Despite strong results, the stock has cooled recently, with a weekly decline and gains over longer periods. The main constraint is capital intensity, with Q1 capex rising to $35.7 billion and free cash flow falling 46.63% year over year. Full-year 2026 capex guidance increased to $180 billion to $190 billion, and 2027 capex is expected to rise further. Market expectations remain bullish, but investors focus on ROI and valuation rather than spending alone.
"Q1 2026 revenue hit $109.9 billion, up 22% year over year, EPS of $5.11 came in well above the $2.63 consensus, and Google Cloud backlog nearly doubled to $462 billion."
"The pressure point is capital intensity. Capex more than doubled to $35.7 billion in Q1, free cash flow fell 46.63% year over year, and CFO Anat Ashkenazi raised the full year 2026 capex guide to $180 billion to $190 billion and warned "we expect our 2027 CapEx to significantly increase compared to 2026.""
"A beta of 1.267 means every macro tremor amplifies through the stock. Polymarket gives Alphabet just a 20% probability of being the world's largest company by year end 2026 chance. Investors want ROI, not just spend."
"Wall Street consensus sits at $417.94, with 13 Strong Buys, 47 Buys, 6 Holds, and zero sells, or 91% bullish. Our model's base case lands at $457.44, a 20.58% upside, with a bull case of $529.87 and a bear case of $364.21. Confidence on the base call is 90%."
Read at 24/7 Wall St.
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