Google’s parent company, Alphabet, beat Wall Street expectations on Wednesday and is planning a sharp increase in capital spending in 2026. AI Infrastructure.
alphabet Wednesday reported a $34.5bn profit for the recently ended quarter, with revenue from cloud computing up 48%.
The company expects to spend between $175bn and $185bn this year A lot more About $115bn, above analysts’ estimates.
On the earnings call, investors pressed Alphabet Chief Executive Sundar Pichai on a significant increase. “Although we have increased our capacity, we have constrained supply. Obviously, our CapEx spending this year is with an eye toward the future,” Pichai said. “We’re constantly planning for the long term.” Pichai said he expects Google to “go through the year in a supply-constrained way.”
Anat Ashkenazi, Alphabet’s chief financial officer, explained the ways Google is trying to free up capital. According to Ashkenazi, having an AI-powered tool involves building its own data centers “to make sure we do it in the most efficient way.” is called A “coding agent” writes half of the company’s code (before engineers review it) and uses AI across departments for even small tasks like managing invoices.
“We’re seeing our AI investments and infrastructure return and growth across the board, Pichai said.
Alphabet’s annual revenue exceeded $400bn for the first time, Pichai added.
The company reported revenue of $113.83bn in the fourth quarter of 2025 – beating Wall Street estimates of $111.43bn. Earnings per share (EPS) also beat Wall Street estimates: The company reported $2.82 in EPS, compared to expectations of $2.63.
The report comes after several months of good news for the company in the AI race.
The latest version of Gemini released by Google in November, considered the industry leader in generative AI, is the development Incited panic At competitor OpenAI. Alphabet stock increased by 3% When Google launched the model.
In January, Google and Apple announced The company will begin using Gemini to power AI features like Siri; Apple Assistant has previously encountered Criticism Not as sophisticated and accurate as its competitors. Valuation of Google increased to $4tn After the deal, it became the second most valuable company in the world.
Analysts call the multi-year contract a Huge success For Google: The tech giant beat out competitors like OpenAI and gained access to Apple’s user base 2.5bn active devices.
“Gemini is becoming the AI engine for the world’s most successful software companies,” Pichai said Wednesday.
Alphabet’s projected spending on AI infrastructure means its capital spending could double this year. Shares were volatile in after-hours trading, with an increase in spending by investors against a rise in revenue and profits.
Big rivals like Amazon Web Services and Microsoft’s Azure, Google Pichai said the cloud is struggling with capacity constraints and that spending is necessary to “meet customer demand and capitalize on the growing opportunities in front of us.”
As big cloud companies collectively spend huge sums on their infrastructure, investors are increasingly concerned about the payoffs from AI investments. Meta last week increased capital investment for AI development by 73% this year.
As the AI arms race heats up, Google’s Gemini AI Assistant app has surpassed 750 million monthly users, up 100 million from November, Pichai said.
Driverless cars segment Waymo AI is working on integrating the model and Google has announced about it Chrome browser Also adopts more Gemini AI features.
Google is still dealing with scrutiny from lawmakers and regulators; The company has faced years of legal battles with US antitrust regulators over alleged fabrications Illegal monopoly Through online search and advertising. That fight reignited this week as the Justice Department and several states filed an appeal of last year’s landmark antitrust ruling, in which only a judge imposed Modest limitations On company contracts. The federal government has sought stricter sanctions. Google executives did not discuss legal action on the earnings call.
