Google to double spending as earnings beat expectations

Alphabet reported fourth-quarter revenue rose 18% and net income was $34.5 billion, and the company said it plans to increase capital spending to $175–$185 billion in 2026 to support AI and data-center capacity.

Alphabet reported stronger-than-expected fourth-quarter results and announced a large increase in planned capital spending to support artificial-intelligence work and data-center capacity. Revenue grew 18% in the quarter and net income rose 30% to $34.5 billion. The company described the higher spending as intended for AI model development and the infrastructure needed to train and run those models. This follows a year in which Alphabet reported record annual sales. Key details: - Fourth-quarter sales were nearly $114 billion and earnings per share were $2.82, up 31% from a year earlier. - The company reported record 2025 sales of $403 billion and profit of about $132 billion for the year. - Alphabet said it expects capital expenditures of $175 billion to $185 billion in 2026, up from $91 billion to $93 billion in 2025. - Google Cloud had nearly $18 billion in fourth-quarter revenue, a 48% increase from the same period in 2024. - The article mentions the Gemini 3 AI model and that the Gemini app has about 750 million monthly users; it also reports search revenue of about $63 billion in the quarter. - The article mentions shares traded between about 6% lower and 2% higher after hours, and that Alphabet rose 65% last year and recently reached a $4 trillion valuation alongside Nvidia. Summary: Alphabet’s quarter showed continued strength in advertising and cloud revenue, and the company is shifting to much higher capital spending to support AI initiatives and related infrastructure. The business reported record annual sales in 2025 and said it will carry out a substantially larger 2026 capital plan. Ongoing legal and regulatory matters around search and ad technology remain active, and the company’s increased spending plan is the next major development identified in the report.