Alphabet down premarket after Q4 earnings beat. What’s happening

The Google parent shed 4.9% in premarket as of 7:50 a.m. ET, after closing nearly 2% lower on Wednesday. After the bell, Alphabet reported fourth-quarter revenue of $113.83 billion, above the $111.43 billion estimate from analysts polled by LSEG.

Its Google Cloud division earned $17.66 billion in revenue versus a forecast of $16.18 billion, according to Street Account. YouTube Advertising earned $11.38 billion in revenue versus the estimated $11.84 billion.

The tech giant said it would significantly increase its 2026 capital expenditure to between $175 billion and $185 billion — more than double its 2025 spend. A significant portion of capex spending would go towards investing in AI compute capacity for Google DeepMind.

“Cloud’s growth is astonishing, measured by any metric: revenue, backlog, API tokens inferenced, enterprise adoption of Gemini. These metrics combined with DeepMind’s progress on the model side, starts to justify the 100% increase in capex in ’26,” they said.

“The AI story is getting better while Search is accelerating – that’s the most important take for GOOG,” they added.

Deutsche Bank analysts said in a note on Thursday that Alphabet has “stunned the world” with its huge capex spending plan. “With tech in a current state of flux, it’s not clear whether that’s a good or a bad thing,” they wrote.

Correction: This story has been updated to reflect that Alphabet shares were down on Thursday.