Google Posts Record Revenue but Reports First Negative Cash Flow Quarter Due to Massive AI Spending

Google reported $119.8 billion in revenue for Q2 2026, beating analyst expectations, but its stock fell as the company disclosed a first-ever negative cash flow quarter. The search giant's operating cash flow rose 40% year over year to $39.1 billion, yet that was outpaced by heavy capital expenditures on AI infrastructure. Key revenue drivers included $63.3 billion from search, $24.8 billion from Google Cloud (up 23.8% from Q1), and $11.1 billion from YouTube ads, which grew 12% after extending ad lengths.