Did Alphabet beat its fourth-quarter earnings expectations?

Yes, Alphabet's fourth-quarter revenue and earnings per share exceeded Wall Street forecasts.

Why did Google's stock performance falter after the earnings report?

Investors focused on Alphabet's significantly increased capital spending plans for 2026, which are projected to reach between $175 billion and $185 billion.

What is Alphabet's projected capital expenditure for 2026?

Alphabet has guided for capital expenditures between $175 billion and $185 billion in fiscal year 2026, primarily for AI infrastructure.

Home / Business and Economy / Alphabet's AI Bet: Massive Spending, Uncertain Returns

Alphabet's AI Bet: Massive Spending, Uncertain Returns

5 Feb

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Summary

Alphabet's Q4 earnings surpassed Wall Street forecasts due to strong Search and Cloud growth.
Company plans $175B-$185B capital expenditures for AI in 2026, a significant increase.
Despite revenue beats, stock dipped as investors weighed high future spending against current performance.

Alphabet's AI Bet: Massive Spending, Uncertain Returns

Alphabet announced a strong fourth-quarter performance, with revenue reaching $113.8 billion and earnings at $2.82 per share, surpassing analysts' expectations. This growth was propelled by the company's core businesses, including Search and Google Cloud, which experienced accelerated momentum. Google Services revenue rose by 14% to $95.8 billion, demonstrating the enduring strength of its advertising model.

Google Cloud emerged as a significant growth driver, with revenue surging 48% year-over-year to $17.7 billion. This performance underscores Cloud's increasing contribution to Alphabet's earnings, fueled by enterprise demand and AI-related workloads. The company's full-year 2025 revenue reached $402.8 billion, also exceeding projections.