Shares of Alphabet (Google's parent company) fell 6% at the start of trading Thursday, as renewed concerns about massive spending on artificial intelligence emerged following the first batch of earnings from major tech companies.

The second-quarter results of Alphabet and Tesla - the first of the "Magnificent Seven" mega-cap stocks to report this season - failed to convince investors.

Although Alphabet reported its strongest quarterly growth in cloud computing business in history, the results were not enough to soothe investors as the focus shifted toward the company's plans to increase spending, according to Reuters.

Shares of Google's parent company fell 5.4% in pre-market trading.

Google-owner Alphabet reported better-than-expected quarterly results in terms of revenue for the second quarter, which reached $119.8 billion, up 24%, supported by 82% growth in cloud computing business.

Quarterly earnings came in at $112 billion, up 298% year-on-year, but the company's shares declined in after-hours trading after it raised its capital expenditure expectations for the year.

Alphabet now expects capital expenditure between $195 billion and $205 billion in 2026, up from previous expectations of $180 billion to $190 billion, as it seeks to strengthen its position in the AI race.

The results showed that Google Cloud revenue increased 82% year-on-year to $24.8 billion, compared to about $20 billion in the previous quarter, which recorded annual growth of 63%.

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