Alphabet (GOOGL) shares declined significantly despite the company reporting fourth-quarter 2025 earnings that surpassed analyst expectations. The company generated $113.8 billion in revenue. Net profit reached $34.5 billion, or $2.82 per share, fueled by growth in the Search and Cloud divisions.
The positive results were eclipsed by a massive capital expenditure forecast for 2026. Alphabet projected spending between $175 billion and $185 billion to build out infrastructure for artificial intelligence. This figure nearly doubles the estimates previously held by many analysts.
Investors reacted negatively to the scale of the planned spending. The sell-off reflects growing concerns regarding the immediate profitability and long-term return on these substantial AI investments.