** Shares of Google parent Alphabet GOOGL.O down 3.6% at $329.63 premarket

** Co reported its best-ever quarter of growth for its cloud computing division that surged 82% to $24.8 bln but significant capex hike weighed on investor sentiment

** Google also posted its first-ever negative free cash flow and a slight miss on adjusted EPS in Q2

** "The business model appears to be morphing rapidly from high margin ads to one dominated by Cloud (seemingly headed for ~30%+ of total revenue) where FCF is almost certainly negative in '27," Piper Sandler said

** Co raised its 2026 capex forecast to $195-$205 bln, citing need for more AI capacity, it previously expected to spend between $180-$190 bln this year

** Google's capex hike comes as delays to Gemini 3.5 Pro heighten concerns over its AI competitiveness amid intensifying pressure from Anthropic and OpenAI

** Average rating of 62 analysts on the stock is 'buy' and the median price target is $430.00, as per LSEG data

** As of last close, Google up 9.3% YTD