By Deborah Mary Sophia and Kenrick Cai<\/p>\n
Feb 4 (Reuters) – Alphabet said on Wednesday that capital expenditure could as much as double this year, in yet another aggressive spending ramp-up by the Google parent as it deepens investments to push ahead \u200bin the AI race.<\/p>\n
Alphabet shares were volatile in after-hours trading – falling 6% before recouping losses, as investors weighed the swell \u200cin spending against surging revenue and profit, both of which beat expectations in the December quarter.<\/p>\n
The company said it was targeting capital expenditure of $175 billion to $185 billion this year, a \u200cmassive jump compared with average analyst expectations that it would spend about $115.26 billion this year, according to data compiled by LSEG.<\/p>\n
CEO Sundar Pichai said in a release that Alphabet hiked its forecast spending “to meet customer demand and capitalize on the growing opportunities we have ahead of us.”<\/p>\n
He added: “We\u2019re seeing our AI investments and infrastructure drive revenue and growth across the board.”<\/p>\n
The company spent $91.45 billion in 2025, primarily on AI infrastructure including servers, data centers and \u2060networking equipment. That compares with its projections for \u200ctotal spending of between $91 billion and $93 billion last year.<\/p>\n
Growth in Google’s cloud division, where the company is enjoying early returns on AI investment, helped the stock pare losses. The unit’s revenue grew 48% to $17.7 billion in the fourth \u200dquarter ended December, compared with analysts’ average estimate of a 35.2% jump, according to data compiled by LSEG.<\/p>\n
“Google Cloud growth was far ahead of expectations and importantly higher growth than Microsoft Azure for the first time in several years,” said Gil Luria, D.A. Davidson analyst. “The acceleration in Google Cloud seems to justify the \u200bincreased [capex] investment.”<\/p>\n
The company reported total revenue of $113.83 billion for the quarter, beating analyst estimates of $111.43 billion, per LSEG data. Adjusted profit per \u200cshare of $2.82 also beat estimates of $2.63.<\/p>\n
Cloud computing majors have poured hundreds of billions of dollars to expand their AI infrastructure, both to meet the growing enterprise demand for their cloud services and to fuel their own development of AI technologies and products.<\/p>\n
Like larger rivals Amazon Web Services and Microsoft’s Azure, Google Cloud has been grappling with capacity constraints that have dented its ability to fully cash in on AI demand from its customers.<\/p>\n
Along with Meta, the big cloud companies are expected to collectively shell out more than $500 billion on AI this year. Meta last week \u2060hiked capital investment for AI development this year by 73%, targeting spending between $115 billion \u200band $135 billion, while Microsoft also reported record quarterly capital expenditure.<\/p>\n
The aggressive expansion in outlay \u200bcomes at a time when investors have increasingly grown concerned about payoffs from AI investments. However, Google has been able to show strong progress in its AI efforts.<\/p>\n
The launch of its latest Gemini 3 model in November saw \u200dstrong reception and propelled the company \u2060forward in the AI arms race. Following the launch, Sam Altman, CEO of AI frontrunner and ChatGPT creator OpenAI, reportedly issued an internal “code red” to push teams to accelerate development.<\/p>\n
Google’s Gemini AI assistant app exceeded 750 million users per month, Pichai said, up \u2060by 100 million compared with November.<\/p>\n
Last month, Google struck a deal to power Apple’s revamped Siri voice assistant with its Gemini models, a partnership that unlocks a huge \u200cmarket for Google, with Apple’s installed base of over 2.5 billion devices.<\/p>\n
(Reporting by Deborah Sophia in Bengaluru and Kenrick Cai \u200cin San Francisco; Editing by Pooja Desai, Sayantani Ghosh and Matthew Lewis)<\/p>\n","protected":false},"excerpt":{"rendered":"By Deborah Mary Sophia and Kenrick Cai Feb 4 (Reuters) – Alphabet said on Wednesday that capital expenditure…\n","protected":false},"author":3,"featured_media":566706,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[6],"tags":[7060,69746,64,171528,2722,48987,86992,16795,67,132,68],"class_list":["post-566705","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alphabet","tag-analyst-expectations","tag-business","tag-capital-expenditure","tag-google","tag-google-cloud","tag-lseg","tag-spending","tag-united-states","tag-unitedstates","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116014857815401351","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/566705","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=566705"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/566705\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/566706"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=566705"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=566705"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=566705"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}