Alphabet’s stock fell 5% as the company’s spending plans exceeded forecasts, with 2026 capital expenditures projected to reach $175B-$185B, double the previous year’s investment. Concerns arise about Big Tech’s $500B AI investment plans.

Alphabet CFO stated the increased spending would focus on AI infrastructure for Cloud and Services segments to meet growing demand and develop frontier AI models, which have already shown positive results in Google Cloud’s revenue growth.

Alphabet’s fourth quarter financial results surpassed Wall Street estimates, with revenue up 18% to $113.8B and earnings per share rising to $2.82. Google Services revenue grew 14%, with AI driving Search revenue as users engage with Google’s AI-powered tools.

Recent successes, including the release of the Gemini 3 AI model, a deal with Apple, and higher Google Cloud revenue, have boosted Alphabet’s stock by over 20%. The company’s momentum in AI innovation and partnerships has positioned it as a leader in the AI race, benefiting from increased investments.

RBC Capital Markets analyst notes the positive impact of the Gemini app’s performance and Google Cloud revenue spike on Alphabet’s decision to increase spending in 2026. Analysts view these as strong indicators supporting the company’s investment strategy in AI development and infrastructure.

Read more at Yahoo Finance: Alphabet stock sinks after Google parent announces $180 billion spending plan for 2026 in massive AI bet