Subject: Re: Investor Presentation June 3
B of A on Equity raise from a note issued June 3, 2026.

Concerns: Deeper investment cycle and dilution overhang

"We have had investor questions on what this raise signals for future capex, and why
equity vs debt. Concerns on the raise could include that 1) raising equity implies that
free cash flow is insufficient to fully fund the accelerating AI investment cycle and that
Google could move to a net FCF deficit in future quarters, 2) there could be a dilution
overhang from the raise and ~$40bn ongoing ATM program, particularly following a
period when buybacks were lowering share count (for reference, Alphabet repurchased
$47bn stock in 2025 and $62bn in 2024), and 3) more data points could fuel concerns on
potential AI infrastructure overbuild. As for use of equity vs debt, our high-level analysis
suggests that an $84.75bn debt raise at 7% interest could be 2.8% dilutive to 2027 EPS,
while raising a similar amount in equity at an average price of $350, or 242mn shares,
would be only 1.9% dilutive. Google’s equity raise could also add to concerns that
Amazon and Meta could also raise more capital to fund increasing capacity investment."