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Google said it plans to spend at least $55bn more on capital expenditure this year than Wall Street had forecast, as it doubles down on its huge spending on AI.
The search giant increased its forecast for capex in 2026 to a range of $175bn to $185bn, far exceeding analysts’ expectations for around $120bn, Google’s parent company Alphabet said on Wednesday.
Fourth-quarter capital expenditure was up to $27.9bn, almost doubling from $14bn last year and exceeding expectations for $27.7bn. It spent $91.4bn over the course of 2025, indicating that capex will double this year.
“We’re seeing our AI investments and infrastructure drive revenue and growth across the board,” said chief executive Sundar Pichai. He said the capex forecasts were “to meet customer demand and capitalise on the growing opportunities we have ahead of us”.
The spending spree overshadowed a second successive quarter of $100bn-plus revenue, driven by strong earnings for the search giant’s advertising and cloud computing divisions as demand for AI continues to grow.
Fourth-quarter net income increased 30 per cent from the year before to $34.5bn, beating analysts’ expectations of $31.9bn. The company made $132bn of profit during the whole of 2025.
Revenue rose 18 per cent to $113.8bn in the three months to the end of December, beating the average estimate of $111.3bn, according to FactSet data. Annual sales surpassed $400bn for the first time.
Google’s core search and advertising business grew 17 per cent to $63.1bn, hitting estimates of $61.3bn. YouTube ads rose 9 per cent to $11.4bn.
Cloud revenues rose 48 per cent to $17.7bn against the average $16.3bn estimate, as demand for computing power to train and run AI models escalates.
Alphabet shares have rallied 61 per cent in the past 12 months, pushing its market cap past $4tn to surpass Microsoft as the third-largest company in the world.
The stock initially fell more than 7 per cent in after-hours trading following the earnings report but recovered to trade down 2 per cent.