Google Goes Wild After Hours After Beating Estimates, Projects Mindblowing CapEx

Alphabet (Google) initially faced investor skepticism due to its high valuation and a market already priced for perfection. Despite strong Q4 results exceeding expectations in earnings and revenue, a staggering 2026 capex forecast of $175-185 billion spooked investors. This caused a significant after-hours stock drop of up to 7.5%, wiping out billions in market capitalization. However, the stock surprisingly rebounded and turned positive, recovering a substantial amount of its lost value. Google Cloud revenue saw impressive growth, driven by enterprise AI infrastructure and solutions. YouTube's annual revenue surpassed $60 billion, and subscriptions across consumer services are rising. The concerning factor was the surprisingly immense capex, almost doubling the 2025 figure and far exceeding expectations. This spending is intended to fuel AI investments and infrastructure in a competitive market. Despite the initial negative reaction, the company's investments in AI and its Gemini app's success seem to reassure investors. The company's future success depends on continuing momentum in cloud and search advertising businesses.