As capital spending doubled, Alphabet’s market value instantly shed over 1 trillion.

(New York, Feb 5)
Alphabet, the parent company of Google, reported stronger-than-expected results for the fourth quarter of last year. Earnings per share came in at US$2.82, beating the market consensus of US$2.65, while maintaining year-on-year growth above 30%. EPS rose 31% from a year earlier, slightly below the roughly 35% pace seen in the previous quarter.

Revenue increased 18% year-on-year to US$113.83 billion, surpassing analysts’ estimates of US$111.43 billion and setting a new record high.

In a mixed development, Alphabet’s R&D expenses surged 42% year-on-year, reflecting heavier investment in artificial intelligence (AI). Even after factoring in a one-off US$2.1 billion Waymo-related charge, the company’s margins remained elevated at above 30%.

Capital expenditure, however, became the main focal point. Alphabet posted quarterly capex of US$91.45 billion, far above the Street’s expectation of US$28.17 billion. The company also guided for full-year capex of US$175–185 billion—nearly double last year’s level and well above analysts’ estimate of US$119.5 billion—shocking Wall Street.

Following the release, Alphabet shares fell as much as 7.5% in after-hours trading on Wednesday (Feb 4), wiping out roughly US$350 billion in market value at one point.

The standout in the quarter was Google Cloud, whose revenue jumped 48% year-on-year to US$17.7 billion, topping the market forecast of US$16.2 billion. The growth was driven by surging demand for enterprise AI infrastructure, enterprise solutions, and core Google Cloud platform products.

Alphabet also said Google Cloud’s annual revenue had exceeded US$70 billion by the end of 2025.