Alphabet posts record $119.8bn Q2 revenue but shares drop 7% on AI spending alarm

Alphabet closed Q2 2025 with record revenues of $119.8bn, up 24% year-on-year, while Google Cloud sales surged 82%. Despite the strong results, shares fell 7% on Thursday after management raised its full-year capital expenditure forecast to $195–205bn. Investors are not spooked by the record quarter itself, but by the accelerating cost of AI infrastructure in the quarters ahead.