$GOOGL just delivered one of the strongest quarters of the AI cycle with Cloud revenue growing 82% and operating margins reaching 36%. But the market focused on several shock factors including another $15B capex increase in just three months, a further step-up expected in 2027 and temporary reliance on more expensive third-party capacity. That spending pushed quarterly FCF negative for the first time in more than 20 years overshadowing an otherwise exceptional operating performance.
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