Google Stock Erases After-Hours Gains: What's Rattling Investors?

Google’s strong quarterly results were overshadowed by its significant spending plans.

• Alphabet forecast 2026 capital expenditures between $175 billion and $185 billion.
• For Q4, revenue rose 18% to $113.8 billion, and cloud unit sales rose 47.7% to $11.9 billion – both above expectations.
• Stocktwits sentiment for GOOGL shifted to ‘extremely bullish’ from ‘bullish.’

Alphabet Inc.’s eye-popping capital spending plan dented investor sentiment, even as the company topped fourth-quarter earnings estimates and crossed $400 billion in annual revenue for the first time.

The search and AI giant forecast 2026 capital expenditures of $180 billion at the midpoint, well above the $119.5 billion and nearly double what it spent last year. In fact, expected spending in 2026 would be more than what the company spent in the three prior years.

Google shares initially jumped after the earnings release in post-market hours. They ultimately declined 0.5%.

The company said its massive investments are intended to support sharp growth across its product portfolio through new AI development and are essential for competing with rivals such as Amazon, Microsoft, and OpenAI. 

CEO Sundar Pichai reassured investors that those are translating into material gains: “We’re seeing our AI investments and infrastructure drive revenue and growth across the board… Search saw more usage than ever before, with AI continuing to drive an expansionary moment.”

Strong Q4 Report

That took the sheen off a strong quarter. Revenue increased 18% to $113.8 billion for the October to December period, beating analysts’ estimates of $111.5 billion. Adjusted profit rose 31% to $2.82 per share, comfortably beating the consensus of $2.64 per share.

After the dull showing in Microsoft’s cloud business, Google delighted investors with a 47.7% growth in its cloud business, handily beating expectations of 35% growth.

Google Search revenue grew 17% to $63.01 billion, while YouTube sales rose 9% to $11.38 billion.

Analyst, Retail Reaction To GOOGL Earnings

The company's AI strategy is gaining substantial traction, with Gemini 3's launch in November marking a major milestone, CFRA Research said in an investor note. While massive capex may constrain near-term margins, it positions Google to capitalize on expanding AI opportunities across its ecosystem.

On Stocktwits, sentiment for GOOGL shifted to ‘extremely bullish’ from ‘bullish’ the previous day, amid ‘extremely high’ message volume.

“$GOOGL we saw a knee-jerk selloff initially because traders were spooked by Google’s big capex spending. But then traders looked at the numbers and realized Google might actually know what it is doing. Go deep, go long, get rich,” said a user.

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