Alphabet’s $460 Billion Cloud Backlog Fuels a Record AI Spending Spree

Alphabet is racing to build out its artificial intelligence infrastructure faster than demand can be met, with Google Cloud’s order backlog swelling to roughly $460 billion. The tech giant’s AI features now count a billion monthly users, and search query volume in that segment is doubling every quarter. But even as the company mobilises a record capital expenditure plan, a new UK publisher opt-out rule introduces an unfamiliar risk to its most vital revenue engine: Google Search.

The capital intensity is staggering. Management is targeting between $180 billion and $190 billion in capital spending this year, funded in part by a recently completed capital raise of nearly $85 billion. The investment splurge is directed squarely at data centre capacity — cloud customers are effectively clamouring for compute power that the company currently cannot supply fast enough. On Wednesday, Alphabet shares traded at €311.70 in Europe, down 1.19% on the day, but still up more than 102% over the past twelve months.

Wall Street analysts have taken note. Several major investment banks lifted their price targets in June, reflecting optimism that the cloud pipeline will translate into sustained earnings growth. Loop Capital sees the stock hitting $490, Mizuho $460, Piper Sandler $445, and Bank of America $430.

Income-focused shareholders also received good news. Monday marked the ex-dividend date for Alphabet’s quarterly payout, set at $0.22 per share — a 5% increase from the prior quarter. The cash distribution is scheduled for June 15, 2026, underscoring that the company is simultaneously funding a historic capex cycle and rewarding equity holders.

Yet the cloud-driven euphoria sits alongside a brewing regulatory and publisher storm. Since June 3, Google has allowed website operators to opt out of having their content used in generative AI search functions, including AI Overviews, AI Mode, and AI Overviews in Discover. The catch: opting out means losing traffic and impressions from those surfaces, and publishers lack comprehensive data on the conversion impact. The new controls take effect on June 17, though the Gemini app remains excluded from the opt-out mechanism.

Should investors sell immediately? Or is it worth buying Alphabet?

The stakes for Alphabet are enormous. Google Search generated $60.4 billion in revenue during the first quarter of 2026, up 19% year-on-year and representing the lion’s share of Alphabet’s total $109.9 billion in revenue. AI Overviews alone now reaches more than 2.5 billion monthly users, and AI Mode has crossed the billion-user threshold. Google insists it has increased the density of links in AI-generated answers, but publishers worry about the long-term traffic arbitrage.

Regulators are watching closely. The UK’s Competition and Markets Authority (CMA) described its June 3 requirements as a global first, demanding that publishers receive effective tools to exclude their content from AI features and clearer source attribution in search results. Google has nine months to implement all changes and must publish compliance reports every six months. The CMA reserves the right to take further action if the measures fall short.

For Alphabet’s investors, the calculus is delicate. The opt-out temporarily reduces the risk of a sharper regulatory confrontation, but the UK model could set a precedent for other markets demanding similar publisher rights. Meanwhile, the company reported an operating profit of $39.7 billion in the first quarter, with a margin of 36%, offering a thick cushion. The real test is whether that earnings base can hold as Google pushes AI deeper into search while keeping publishers, regulators, and advertisers aligned.

The stock closed at $363.31 in U.S. trading, down $5.21 on the session, giving Alphabet a market capitalisation of roughly $4.4 trillion. With the June 17 opt-in deadline looming, the next concrete data point on publisher behaviour will soon arrive — and with it, a clearer picture of whether Alphabet can balance its cloud boom against a search revenue recalibration.