Alphabet(US:GOOG) New York Post·2026-02-05 00:37Core Viewpoint - Alphabet is significantly increasing its capital expenditure to between $175 billion and $185 billion this year, a substantial rise from analyst expectations of approximately $115.26 billion, as it aims to enhance its AI capabilities and meet customer demand [2][4]. Group 1: Capital Expenditure - The company plans to double its capital expenditure this year, reflecting an aggressive investment strategy in AI infrastructure [1][4]. - In 2025, Alphabet spent $91.45 billion primarily on AI infrastructure, which includes servers, data centers, and networking equipment [4][10]. - The increase in capital expenditure is intended to capitalize on growing opportunities and customer demand [4][9]. Group 2: Revenue and Profit Performance - Alphabet reported total revenue of $113.83 billion for the quarter, surpassing analyst estimates of $111.43 billion [6]. - The adjusted profit per share was $2.82, exceeding expectations of $2.63 [6]. - The cloud division's revenue grew by 48% to $17.7 billion in the fourth quarter, outperforming the average analyst estimate of a 35.2% increase [5][6]. Group 3: AI Investments and Market Position - Google Cloud's growth has outpaced expectations and surpassed Microsoft Azure's growth for the first time in several years, justifying the increased capital expenditure [6]. - The launch of the Gemini 3 model has been well-received, contributing to Google's competitive position in the AI market [11]. - Google's Gemini AI assistant app has exceeded 750 million users per month, marking a significant increase of 100 million users since November [11]. Group 4: Industry Context - Major cloud computing companies, including Google, are expected to collectively invest over $500 billion in AI this year, reflecting the industry's commitment to expanding AI infrastructure [9]. - Google has formed a partnership with Apple to power Siri with its Gemini models, tapping into a vast market with over 2.5 billion Apple devices [12].