Alphabet Reveals Ambitious 2026 Capital Expenditure Plans

Morgan Winslow

Published: February 4, 2026 5:06 PM ET

Alphabet, the parent company of Google, has announced ambitious capital expenditure plans for 2026. The company is planning to significantly increase its investment in artificial intelligence (AI) infrastructure to remain competitive in the evolving tech landscape.

2026 Capital Expenditure Plans

Alphabet aims to allocate between $175 billion and $185 billion in capital expenditure this year. This projection represents a substantial increase compared to analyst expectations of approximately $115.26 billion, as reported by LSEG. CEO Sundar Pichai emphasized that this hike is essential to meet customer demand and seize emerging opportunities.

Investment Focus on AI Infrastructure

In 2025, Alphabet spent $91.45 billion primarily on AI infrastructure, including servers, data centers, and networking equipment. This was higher than their previous spending estimates for the year, which ranged from $91 billion to $93 billion.

Growth in Revenue and Cloud Division

Alphabet’s revenue for the fourth quarter reached $113.83 billion, surpassing analyst predictions of $111.43 billion. The adjusted profit per share was reported at $2.82, exceeding estimates of $2.63. The Google Cloud division reported a remarkable 48% growth in revenue, amounting to $17.7 billion, compared to an expected 35.2% increase.

2026 Capital Expenditure: $175 billion to $185 billion
2025 Capital Expenditure: $91.45 billion
Q4 Revenue: $113.83 billion
Adjusted Profit Per Share: $2.82
Google Cloud Revenue Growth: 48% ($17.7 billion)

Market Reactions and Competitors

Following Alphabet’s announcement, shares experienced volatility, initially dropping 6% before recovering. Analysts noted that Google Cloud’s growth performance exceeded expectations, indicating a positive outlook.

Rival companies like Amazon Web Services and Microsoft Azure are also investing heavily in AI infrastructure, with market projections suggesting that major cloud providers will collectively spend over $500 billion on AI this year. Notably, Meta recently raised its capital investment for AI by 73%, setting a spending target between $115 billion and $135 billion.

Technological Advancements and Partnerships

Google’s advancements in AI have been noteworthy. The recent release of the Gemini AI model has gained significant traction, with the assistant app now boasting over 750 million monthly users. This is an increase of 100 million since its launch in November.

Additionally, Google secured a deal to enhance Apple’s Siri voice assistant with its Gemini technology. This partnership presents a substantial market opportunity, given Apple’s large user base of over 2.5 billion devices.

Overall, Alphabet’s strategic investment in AI infrastructure positions it favorably in the competitive cloud services market, while its revenue growth continues to reassure investors amid rising expenditures.