Google released its fourth-quarter earnings on Wednesday. The data showed that the company’s revenue was higher than analysts’ expectations, and earnings per share also exceeded analysts’ forecasts.

In the company’s latest earnings report, earnings per share came in at $2.82 and total revenue reached $113.8B, versus analysts’ prior expectations of $111.13B in revenue and $2.64 in earnings per share. At the same time, the company projected that its capital expenditure for 2026 would be significantly higher than expected.

So far this year, Google’s shares have risen 6%, outperforming the Nasdaq 100’s 1.42% decline over the same period. Due to the potential impact of AI products on software companies, the market has seen large-scale capital outflows from the software sector. Meanwhile, concerns over high valuations and large-scale spending plans have resurfaced, putting pressure on Wall Street.

Like other tech giants, Google’s parent company has laid out a massive AI spending plan, setting aside billions of dollars for data centers and chips, and investing heavily in AI models and platforms.

Google said it expects capital expenditure in 2026 to reach $175B to $185B, a sharp increase from 2025. Wall Street had expected $119.5B.

The company has rapidly improved its Gemini model and fully integrated it across its product lines. This effort requires substantial investment to support model optimization and to meet demand from cloud customers. These investments have begun to show early results.

Google is supplying Anthropic with up to one million dedicated AI chips, reinforcing its position as a key infrastructure provider in the AI space. At the same time, Gemini will also provide AI technical support for Siri on Apple’s iPhone.

Market Commentary:

To justify the massive spending, Google needs to demonstrate growth momentum in its cloud services and search advertising businesses. The company said that large-scale investment in AI — including new infrastructure build-out, R&D spending, and talent acquisition — is crucial to competing with rivals such as Amazon, Microsoft, and OpenAI.