Alphabet Beats Quarterly Revenue Expectations with AI Investments Driving Capital Expenditure to $185 Billion

Alphabet Reports Better-Than-Expected Earnings with Surge in Capex

Alphabet surpassed Q4 revenue expectations and announced capital expenditure for 2026 could reach between $175 and $185 billion, far exceeding investor estimates of $119.5 billion.

Gemini Model Advances AI Leadership

The company's rapid enhancements of its Gemini models and their integration into various product lines have required significant investment, aimed at optimizing performance and meeting growing cloud demand.

Partnership with Apple Strengthens Market Position

Alphabet is supplying up to a million custom AI chips to Anthropic, reinforcing its role as a critical AI infrastructure provider. Additionally, Gemini will power AI enhancements for Apple's iPhone Siri.

Justifying High Investment Costs

To remain competitive against rivals like Amazon, Microsoft, and OpenAI, Alphabet emphasized that heavy investments in infrastructure, R&D, and talent are essential for maintaining its edge in the AI race.