Google Says Spending Could Double This Year Amid Its AI Push. Investors Don't Seem Excited

ETHReserveBank · 2026-02-11T15:45:32+00:00

Alphabet shares fell over 5% after announcing plans to double its capital expenditures to $175-$185 billion to expand its AI infrastructure, resulting in a $170 billion market value loss. Despite strong fourth-quarter results, investor concerns over spending persist.

ETHReserveBank

2026-02-11 15:45:32

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Key Takeaways

Alphabet shares sank Thursday after the Google parent outlined a massive increase in its spending this year.
The company’s fourth-quarter results topped estimates as cloud revenue surged.

Investopedia Answers

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Alphabet (GOOGL) shares slumped Thursday after the Google and YouTube parent laid out massive spending plans to support its AI ambitions.

The shares were down over 5% in recent trading, after the company forecast $175 billion to $185 billion in capital expenditures this year as it builds out its AI infrastructure, roughly double the $91.45 billion Alphabet spent in 2025.

With Thursday’s move, Alphabet shed some $170 billion of its market value, pulling its market capitalization back below $4 trillion.

Why This Matters to Investors

Big Tech companies have faced increasing pressure in recent quarters to show their AI spending is paying off and convince investors to support further investment. Thursday’s move could signal that investors are wary of Alphabet’s massive spending plans.

Some Wall Street analysts said they’ve only become more bullish about the stock after the company’s latest results, however. Analysts from JPMorgan, Citi, and Wedbush lifted their price targets following Wednesday’s earnings report, given what they viewed as strong signals of AI demand.

“We acknowledge the concern around investments,” Citi analysts wrote. “But given clear AI demand signals, we believe Google should be investing in product and in alleviating capacity challenges.”

The tech giant topped fourth-quarter estimates with $113.83 billion in revenue and $2.82 earnings per share, as cloud revenue soared 48% year-over-year to $17.7 billion.

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With Thursday’s drop, Alphabet shares have erased most of their gains year-to-date, but are still up more than 60% in the last 12 months.

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