Alphabet signaled a dramatic rise in capital expenditures for 2026, projecting investment up to $185 billion as it accelerates spending to support AI development and address computational constraints. The announcement followed the company’s release of quarterly results that beat market estimates, reflecting substantial gains in revenue and profit.
The company informed investors that its 2026 capital expenses could reach $175 billion to $185 billion, with the upper range more than double its projected spending in 2025. This budget increase centers on expanding AI computing capabilities for Google DeepMind and meeting growing demand from its cloud services division. Alphabet initially outlined plans for higher capital investment last October.
For the most recent quarter, Alphabet posted revenue of $113.83 billion, surpassing analyst expectations of $111.43 billion. Net income grew nearly 30% year over year, reaching $34.46 billion. The performance was bolstered by strength in Google’s core search advertising and cloud services, with annual company revenue exceeding $400 billion for the first time.
Advertising revenue increased 13.5% to $82.28 billion, while YouTube advertising rose 9% to $11.38 billion, although this figure came in slightly below Wall Street projections. Cloud revenue reached $17.66 billion, outpacing analyst forecasts.
Alphabet also reported that its Gemini app now registers over 750 million monthly active users. The latest growth, an increase of 100 million since October, represents a slower pace compared to the previous quarter’s gains.
Alphabet reiterated its expectation for a significant boost in capital investment throughout 2026 as it focuses on expanding AI infrastructure and cloud capabilities.
