Alphabet posts negative cash flow for the first time and loses seven percent in a day

Alphabet reported a negative cash flow for the first time in the second quarter of 2026. The group had been regarded for years as exceptionally cash generative. Long term debt rose 111 percent to 98 billion dollars in the first half of the year.

The trigger is the build out of data centres. Alongside its quarterly figures the company raised its investment guidance for 2026 to as much as 205 billion dollars after lifting the upper end.

The reaction was clear. The share lost seven percent the following day and pulled Amazon, Meta and Microsoft down with it.

The short version

• Alphabet reported a negative cash flow for the first time in the second quarter of 2026, and long term debt rose 111 percent to 98 billion dollars.
• Google Cloud grew 82 percent, while Azure reached 43 percent and Amazon Web Services 37 percent.
• Berkshire Hathaway raised its holding by around 17 billion dollars and now owns just under 106 million shares.

The cloud division grows fastest

The business itself delivers the strongest growth rates in the group. Google Cloud grew 82 percent in the second quarter. For comparison, Azure reached 43 percent and Amazon Web Services 37 percent.

Over twelve months the share is up around 70 percent and had the best reception on Wall Street among the large technology stocks. The reasons given were the faster growth of the cloud division and the spread of the company models in a market shaped by OpenAI and Anthropic.

In the view of analysts at Wedbush the report suggested that capacity remains tight against strong demand.

Berkshire buys in for 17 billion dollars

Berkshire Hathaway delivered a clear vote of confidence. The conglomerate raised its holding by around 17 billion dollars in the second quarter and now owns just under 106 million shares worth about 36.6 billion dollars.

Alphabet is therefore the third largest position in the equity portfolio of Berkshire, behind Apple at 69.7 billion dollars and American Express at 51.9 billion dollars.

Around 60 percent of the new shares were bought directly from the company through a private placement. That followed a share sale by Alphabet of 85 billion dollars, with which the group finances its build out.

Warren Buffett claimed the move for himself in July. He initiated it, he said in an interview.

Meta loses eight percent in a day

At Meta Platforms the reaction was sharper still. The share lost eight percent in a single trading day at the end of July, while Microsoft gained 15 percent on the same day.

The group has raised its investment guidance for 2026 twice and now stands at 125 to 145 billion dollars, after about 72 billion dollars in 2025.

Meta counts among analysts as the most cheaply valued of the very large technology stocks. Scott Devitt of Wedbush named a price target of 920 dollars per share, which would correspond to a valuation of around 2.3 trillion dollars.

A decision from Germany also matters to the group. Apple has to change its consent procedure for tracking user behaviour in almost all EU countries following a ruling by the German competition authority. Easier consent improves access to the data used for targeted advertising and therefore the basis of the Meta business model.

Meta introduced the model of residual value guarantees for data centres, which Broadcom and Nvidia now use as well. Its filings state that payments under such guarantees are not probable, which is why no liability was booked.

Frequently asked questions

Why is the cash flow of Alphabet negative

The trigger is the build out of data centres. Alongside its quarterly figures the company raised its investment guidance for 2026 to as much as 205 billion dollars. Long term debt rose 111 percent to 98 billion dollars in the first half of the year.

How fast does Google Cloud grow in comparison

Google Cloud grew 82 percent in the second quarter. For comparison, Azure reached 43 percent and Amazon Web Services 37 percent. The division therefore has the strongest growth rates in the group.

What did Berkshire Hathaway buy

The conglomerate raised its holding in Alphabet by around 17 billion dollars in the second quarter and now owns just under 106 million shares worth about 36.6 billion dollars. Around 60 percent of that came directly from the company through a private placement.

This analysis is for information only and is not investment advice.