Cambiar Says Alphabet’s AI Spending Is Showing Returns
The fund says Alphabet is expanding computing capacity while search growth and cash generation support its case for continued AI investment.
Alphabet’s AI investment is paying off in its search business, according to Cambiar Opportunity Fund, which also backed the company’s continued expansion of computing infrastructure.
In its Q2 2026 investor letter, the fund said Alphabet’s core search business was growing faster than at any point in more than a decade, excluding the Covid period. It said the company’s latest earnings showed demand was not the problem, describing Alphabet as “monetizing capacity as fast as it's installed.”
The comments address investor scrutiny of the large capital budgets at Alphabet and other major technology companies. Cambiar said Alphabet increased investment to add AI across its products after investors had believed it was falling behind in the AI race.
Cambiar expects Alphabet to remain free-cash-flow positive in 2026, and said the company’s cash generation supports ongoing infrastructure spending. Its assessment did not include other possible sources of liquidity, such as Alphabet’s roughly 5% ownership of SpaceX.
Alphabet shares traded at $340, down 1.19% from the previous close, as of 15:55 UTC on Oct. 1.
This article was produced with the help of AI technology.
Source: Yahoo Finance
