TLDR
- Google rallies on earnings but AI spending shock pushes shares lower
- Strong Google quarter overshadowed by huge 2026 AI capex plan
- Alphabet growth surges yet investors focus on rising AI costs
- Google beats expectations but spending outlook spooks markets
- Big revenue jump meets bigger AI investment surprise at Alphabet
Google posted another solid quarter as Alphabet (GOOG) shares closed at $333.34, down 2.16%, after a sharp late-session selloff. The stock moved toward intraday lows as the company outlined higher spending plans. The update increased focus on the scale of its AI expansion.
Q4 Results Show Strong Growth Across Core Segments
Google reported quarterly revenue of $113.83 billion, and the figure exceeded Wall Street expectations with steady performance across major units. The company delivered earnings per share of $2.82, and the result marked a clear improvement from last year. The update showed continued strength in its global advertising engine.
Alphabet recorded advertising revenue of $82.28 billion, and the total rose 13.5% from the prior year. Google maintained strong demand across search services, and the segment remained the largest contributor to group revenue. The company acknowledged rising cost pressures linked to its ongoing AI programs.
Google Cloud generated $17.66 billion, and the division surpassed market estimates by a wide margin. The unit posted a 47% yearly increase, and the growth highlighted demand for AI-related services. The cloud segment strengthened its position as a key driver for Alphabet.
Capex Outlook Signals Major Expansion in 2026
Alphabet projected capital expenditures of $175 billion to $185 billion for 2026, and the figure nearly doubled its 2025 spend. The company prepared for broader data infrastructure expansion, and the move underscored its long-term strategy. Yet the guidance surprised analysts who expected a lower range.
Google continued scaling high-performance chips and advanced systems, and the effort supported its wider technical roadmap. The group plans to expand facilities worldwide, and the rollout will support future product lines. The company aims to accelerate computing capacity through expanded hardware deployment.
Alphabet’s full-year 2025 capex totaled $91.4 billion, and the result aligned with earlier expectations. The company highlighted increased spending needs, and the new forecast suggested a significant investment cycle ahead. The market reacted to the sharp rise in planned costs.
Broader Momentum Supports Google but Raises Cost Questions
Google recorded strong year-over-year improvements in revenue, and earlier product releases helped lift broader platform engagement. The company reported momentum in its chip business, and recent updates boosted enterprise adoption. Moreover, its AI product suite continued gaining traction across global partners.
Alphabet compared this quarter’s $96.47 billion in revenue to last year’s $96.47 billion and saw sustained execution across its ecosystem. Google delivered stronger earnings, with performance reflecting ongoing efficiency measures. However, the market responded more to forward spending signals.
Google shares had gained more than 60% over the past year, and product demand supported the rally. The latest report extended growth themes, and financial metrics reinforced the company’s competitive position. Still, the stock ended lower as traders assessed the heavy 2026 capex plan.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
