Alphabet’s $80 Billion Flex

In this episode of Motley Fool Hidden Gems Investing , Motley Fool contributors Travis Hoium, Lou Whiteman, and Tyler Crowe discuss:

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Travis Hoium: Why does one of the most profitable companies in the world need more money? Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing . I'm Travis Hoium, joined today by Lou Whiteman and Tyler Crowe. Guys, one of the stranger news announcements this week was that Alphabet announced that they are raising another $80 billion. What got attention was that $10 billion of that is going to come from Berkshire Hathaway . But as neoclouds and Oracle and even some of the other hyperscalers are taking on more and more debt to fund this AI build-out, which is now moving past the operating cash that they're generating from their business — even Alphabet might pass that in 2026 — they need more money. Tyler, Alphabet said, Hey, we want to sell equity, not debt. This is just an interesting move from them.

Lou Whiteman: I think there's a little bit of, like, we've been watching too many industry- and business-related television shows, like Succession , we're all, we're thinking like strategy, like, how can we really stick it to these other players? But let's be honest, they're just looking at the numbers and being like, We need more money. We're not trying to, like, necessarily beat somebody more so than the other. The first thing is the bottom line first. I think this is really the case when it comes to this deal with Google raising $80 billion, just some rough numbers. I think their current capex is somewhere in, like, $170 billion range for 2026. 2027 is probably going to be more, and they're bringing in 175 billion in operating cash over the past 12 months. If you're going to obviously do more, you're going to go past your operating cash flow, and I think this is getting ahead that. They're obviously probably not going to go $80 billion over in a single year. This is probably like, let's get a little bit of a cash cushion and get ahead of it. We've got a decently priced stock right now, and this will be a good time to do it. We'll get Berkshire involved. It'll make it a little bit easier. They've got things like that big Anthropic deal that they signed last year. There is demand for what they want to build.