- Alphabet’s Q4 earnings beat Wall Street expectations, with EPS of $2.82 and revenue of $113.83 billion.
- The Google stock price recovered from a 7% drop to close down only ~2% after-hours.
- Google Cloud revenue surged 48% to $17.66 billion, outpacing expectations and demonstrating strong AI demand.
- Gemini AI reached 750 million monthly active users, validating the company’s massive investment strategy.
- The company announced massive 2026 capital expenditure guidance of $175 billion to $185 billion.
In a dramatic after-hours trading session on Wednesday, Alphabet Inc. stock staged a powerful recovery, closing down just around 2% after initially plunging 7% following its fourth-quarter earnings release. The tech giant’s results significantly surpassed analyst expectations, catalyzing major investor interest and easing immediate concerns about its aggressive AI spending.
The company reported earnings of $2.82 per share on revenue of $113.83 billion, with net income jumping 30% year-over-year to $34.5 billion. Consequently, market sentiment shifted as executives detailed how AI investments are translating directly into revenue growth.
Google Cloud was a standout performer, with revenue surging 48% to $17.66 billion according to its financial disclosures. This growth significantly outpaced major competitors and demonstrated strong demand for its AI services. CEO Sundar Pichai spearheaded discussions, stating “We’re seeing our AI investments and infrastructure drive revenue and growth across the board.”
However, the initial stock drop was triggered by newly disclosed capital expenditure guidance of $175 billion to $185 billion for 2026. This figure represents nearly double its planned spending for 2025. CFO Anat Ashkenazi sought to reassure investors about the financial impact of these plans.
Meanwhile, the Gemini AI platform’s growth to 750 million monthly active users validated the company’s strategic direction. Ashkenazi emphasized that spending would maintain a healthy financial position, citing “Alphabet will make its 2026 investments in a way that maintains a very healthy financial position for the organization.”
The company’s annual revenue exceeded $400 billion for the first time, a significant milestone. Search revenue grew 17%, driven by AI features, while YouTube advertising contributed $11.38 billion. Ultimately, the strong fundamentals and clear AI monetization path supported the stock’s late-session rebound.
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