Alphabet (GOOG): Is Massive Infrastructure Capex Worth It?

Hayden Capital, an investment management firm, released its second-quarter 2026 investment letter, stating that Alphabet Inc. (NASDAQ:GOOG) is investing over $205 billion in capital expenditures (capex) in 2026, a 80% year-over-year increase. The letter highlights the disparity between Alphabet's rising capex and operating cash flow growth, which is only increasing at about 23%.

This investment gap is being funded through external capital, resulting in incremental annual debt rising from 9% of capex in 2024 to 32% over the past year. The company priced an $85 billion equity raise, the largest by a listed corporate, in June. Despite Alphabet being the 7th most popular stock among hedge funds, Hayden Capital believes that certain AI stocks offer greater upside potential and lower downside risk.