Alphabet (Google) reported strong fourth-quarter and full-year results, with annual revenue exceeding $400 billion for the first time. Despite this, the stock price declined due to investor concerns over increased capital expenditures, with spending expected to nearly double in 2026. The market is factoring in potential pressure on free cash flow as a result. However, Alphabet’s strong growth, particularly in AI, and strategic positioning in cloud computing and digital advertising support its long-term investment case. The company’s aggressive investment in AI is already driving growth across its core businesses, with Google Services, Google Cloud, and enterprise AI products all showing strong performance. The company’s cloud backlog has more than doubled year-over-year, reaching $240 billion, indicating sustained revenue momentum. Despite short-term cash flow pressure, analysts maintain a “Strong Buy” consensus on Alphabet stock.

Read more at Barchart: Amid Capex Concerns, Should You Buy, Sell, or Hold Alphabet Stock?