Alphabet’s strong Q4 results led to a dip in stock, with GOOGL falling half a percentage point on Thursday. Despite profit-taking and a recent rally of +70%, investors debate on buying Alphabet shares. Sales hit a record $97.23 billion, with Google Cloud revenue up 48% at $17.66 billion, driving overall growth.

Alphabet’s annual revenue surpassed $400 billion for the first time in 2025, with adjusted EPS reaching a record $10.13. The tech giant didn’t provide traditional guidance but highlighted AI-driven product momentum and cloud backlog strength. Google Cloud backlog increased by 55% to $240 billion at the end of Q4.

Alphabet projects a significant capital expenditure of $175-$185 billion for 2026, double the previous year’s spending. The focus is on data centers to meet rising enterprise demand for AI compute capacity and cloud infrastructure. Despite concerns about profitability, Alphabet boasts a strong ROIC of 31.6%, outperforming other tech giants.

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Read more at Nasdaq: Buy Alphabet Stock After Strong Q4 Results or is it Too Soon?