Google stock fell in extended trading after Alphabet reported quarterly results that beat analyst estimates, even as the company announced a dramatic rise in 2026 capital expenditures.
Alphabet posted earnings per share of $2.82 versus $2.63 estimated, and revenue of $113.83 billion versus $111.43 billion estimated, the company said, while net income rose to $34.46 billion, up almost 30 percent year over year.
Advertising revenue totaled $82.28 billion, up 13.5 percent from a year earlier, and YouTube advertising generated $11.38 billion, short of the $11.84 billion analysts expected, the company reported.
Google Cloud outperformed estimates with $17.66 billion in revenue, beating the $16.18 billion StreetAccount figure and marking a nearly 48 percent increase from a year earlier, Alphabet said.
The company said traffic acquisition costs were $16.59 billion versus $16.20 billion estimated, and its cloud backlog reached $240 billion at quarter end, up 55 percent sequentially and more than double year over year, the finance team reported.
Alphabet CEO Sundar Pichai said Gemini now has more than 750 million monthly active users, up from 650 million the prior quarter, and he added the company lowered Gemini serving unit costs by 78 percent over 2025 through optimizations and utilization improvements.
Other Bets reported $370 million in revenue, down 7.5 percent year over year, and a loss of $3.61 billion, an increase of more than 200 percent; Alphabet said Waymo took a $2.1 billion stock compensation charge and served 15 million trips in five US markets, and in January began operating in Miami.
Planned Capex Surge and Market Ripple Effects
Alphabet said it expects 2026 capital expenditures to range from $175 billion to $185 billion, a forecast the company said will more than double last year’s spend at the top end and fund AI compute capacity for Google DeepMind and cloud customer demand, finance chief Anat Ashkenazi told analysts.
Ashkenazi added that the capex will support strategic investments and aims to improve user experience and drive higher advertiser return on investment in Google services, the company said.
The capex outlook helped push shares of suppliers, with Broadcom rising about 6 percent and Nvidia up about 2 percent in extended trading, as reported, and analysts said the scale of spending is highly favorable for companies that supply AI hardware and custom chips.
Broadcom works on components for Google’s tensor processing units and sells TPU rack systems to other AI labs, while the firm calls its custom chip efforts XPUs and noted those chips are suited to hyperscalers, according to the coverage.
Market reaction was mixed as Alphabet’s stock drifted lower by as much as 3 percent after hours despite the beat on revenue and earnings, reflecting investor attention to both rapid revenue growth and a large planned increase in capital spending.
