Alphabet shares close flat after earnings beat. Here's what's happening
Alphabet shares closed flat on Thursday after the company said it would hugely increase its AI spending in 2026.
TL;DR
- Alphabet's fourth-quarter revenue exceeded analyst expectations.
- Google Cloud revenue surpassed forecasts, while YouTube Advertising revenue fell slightly short.
- The company plans to significantly increase its 2026 capital expenditure to between $175 billion and $185 billion.
- A substantial part of the increased capital expenditure will fund AI compute capacity for Google DeepMind.
- Analysts believe Infrastructure, DeepMind, and Waymo costs are affecting Alphabet's profitability.
- Despite high costs, analysts see justification for the increased capex due to cloud growth and DeepMind's progress.
- The article notes a correction: Alphabet shares were down on Thursday, not flat.