Alphabet down premarket after Q4 earnings beat. What’s happening
alphabet Shares fell 5% on Thursday after the company beat Wall Street expectations for earnings and revenue, and AI spending is projected to rise significantly this year.
Google’s parent company was down 4.9% in premarket as of 7:50 a.m. ET, after closing down nearly 2% on Wednesday. After the bell, Alphabet reported fourth-quarter revenue of $113.83 billion, above the $111.43 billion forecast of analysts polled by LSEG.
According to Street Account, the Google Cloud division generated $17.66 billion in revenue versus estimates of $16.18 billion. YouTube Advertising generated $11.38 billion in revenue versus an estimated $11.84 billion.
The tech giant said it would significantly increase its 2026 capital spending to between $175 billion and $185 billion, more than double its 2025 spending. A significant portion of the capex will go towards investing in Google DeepMind’s AI computing capacity.
What analysts say
Infrastructure, DeepMind and Waymo costs are “putting pressure on overall Alphabet profitability” and will continue to do so in 2026, Barclays analysts said in a note published Thursday.
“The growth of Cloud is staggering, measured by any metric: revenue, savings, API tokens mined, enterprise adoption of Gemini. These metrics, combined with DeepMind’s progress on the model side, begin to justify the 100% increase in capex in ’26,” they said.
“As search gets faster, the AI story gets better, which is the bottom line for GOOG,” they added.
Alphabet “stunned the world” with its massive capital spending plan, Deutsche Bank analysts said in a note Thursday. “In the current state of change in technology, it is unclear whether this is a good or bad thing,” they wrote.
Correction: This story has been updated to reflect that Alphabet shares fell on Thursday.
