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 spending between $175bn and $185bn this year A lot more About $115bn, above analysts’ estimates.
“We are seeing returns and growth across the board from our AI investments and infrastructure,” said Sundar Pichai, chief executive of Alphabet.
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.
