Sou Hu Cai Jing·2026-02-05 15:46Core Viewpoint - Alphabet, Google's parent company, reported better-than-expected revenue and net profit for the fiscal year 2025, but raised its capital expenditure guidance for 2026 significantly, causing investor concerns and a drop in stock price [1][4]. Financial Performance - For Q4 2025, Alphabet achieved revenue of $113.828 billion, a year-over-year increase of 18%, and a net profit of $34.455 billion, up nearly 30%, exceeding market expectations [2][4]. - For the full year 2025, Alphabet reported revenue of $402.836 billion, a 15% increase year-over-year, and a net profit of $132.17 billion, reflecting a 32% growth [2][4]. Capital Expenditure Guidance - Alphabet raised its capital expenditure guidance for 2026 to a range of $175 billion to $185 billion, significantly above the market expectation of $120 billion [4]. - The increased capital expenditure is primarily aimed at investing in AI infrastructure, including servers and data centers, with the 2026 spending nearly double that of the previous year [4]. Market Reaction - Following the earnings report, Alphabet's stock price initially fell by 7.5% in after-hours trading and subsequently dropped about 3% in pre-market trading the next day [1]. - The market's reaction indicates a mixed sentiment towards AI investments, as the significant increase in capital expenditure has raised concerns among investors [4]. Industry Context - The semiconductor sector, particularly companies like AMD, also faced stock price declines despite strong earnings, reflecting a cautious investor sentiment towards AI-related valuations [6]. - The Nasdaq index experienced a drop of 1.51%, with all gains for the year being erased, indicating a broader sell-off in technology stocks [8].