NEW YORK, July 23 -- Alphabet shares dropped roughly 5% in after-hours trading Wednesday after the company lifted its 2026 capital expenditure guidance to a record $205 billion during its second-quarter earnings call, unsettling investors who had just watched the parent of Google post what was otherwise a strong beat. Revenue reached $119.8 billion for the quarter, a 24% jump year on year, and Google Cloud expanded at 82% annually, the fastest rate the division has reported in at least three years.

The reaction was swift and negative. Alphabet's stock had been holding steady through the headline numbers, then fell sharply when chief financial officer Anat Ashkenazi confirmed the new full-year capex target. The prior guidance had been rou...