"Going into the Wednesday report, online finance communities seemed to be putting a lot behind results from the Google parent. Up 70% over the last six months, the search and advertising giant has become the mega-cap tech momentum trade. There had been pockets of panic that if Alphabet's earnings didn't deliver, it would exacerbate a recent tech selloff which has found footing in the media and given adherents some jitters."
"Really, the only real snags were problems that could be observed industry-wide; namely, spending on AI buildout. Alphabet spent more than 3x more money in the fourth quarter on capital expenditures than analysts expected, while forecasting for even more gobs of money to be spent this year: Q4 Capex: $91.45 billion (est. $28.17) 2026 Capex Forecast: $175 - 185 billion (est. $119.5 billion)"
"Nonetheless, the results met the mark and gave investors some relief after a rough day in the markets. Alphabet fell just 1.6% after the market close, not at all an uncommon reaction from investors with increasingly demanding expectations. Unlike Wednesday's other tech-related reports-like Qualcomm and Arm Holdings, which both fell over 9%-the search and advertising giant was able to escape mostly unscathed."
Alphabet reported Q4 revenue of $113.83 billion and EPS of $2.82, both above analyst estimates, with cloud revenue of $17.66 billion. The company dramatically increased capital expenditures, spending $91.45 billion in Q4 versus estimates of about $28.17 billion, and forecasting $175–185 billion for 2026. Investor relief followed the results despite broader tech selloff concerns and high expectations; shares fell roughly 1.6% after the close. Online finance communities had elevated expectations after a 70% share gain over six months. Industry-wide AI buildout spending was identified as the primary near-term snag.
Read at Miami Herald
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