Alphabet Live: Complete Coverage Of GOOG’s Q4 Earnings

We thank you for joining tonight’s live blog on Alphabet’s earnings.

The stock is currently down about 2%, but its been a roller coaster.

Shares originally dropped 7%, then rebounded. At the start of Alphabet’s call they jumped, but faded throughout the call.

At the end of the day, there was little that was new and material during Alphabet’s call, which is likely why initial gains faded.

Yet, Alphabet’s results were very strong. 

This will be seen as a landmark earnings release for the company. That’s not because we expect a massive reaction tomorrow, but rather it’s the quarter Alphabet fully went “all-in” on AI with $180 billion in capex guidance for 2026.

We’d expect the biggest winners tomorrow will be stocks like Broadcom, Lumentum, and Celestica that are key suppliers in Google’s TPU project.

As for Alphabet itself, we come away even more bullish on the company. There will be plenty of debate on Wall Street whether Google’s capital expenditures is too ambitious, but its the right action to take at this moment.

There’s a strong chance Google is able to take significant market share in cloud computing this year as Microsoft struggles with getting more supply online.

Finally, if you enjoyed tonight’s live blog make sure to subscribe to the AI Investor Podcast. It’s free and provides analysis and free recommendations in the space. 

You can check it out here and subscribe in your favorite podcast player. Thanks for attending tonight’s live blog and we hope you continue coming to 24/7 Wall St (or searching events like ‘Alphabet earnings 24/7 Wall St) to get all the latest news on your favorite companies!

Alphabet shares are now down 2% as the call has concluded.

We have our first question directly addressing Alphabet’s massive capex guide:

Eric Sheridan Goldman Sachs Group, Inc., Research Division

Two, if I could. Over the last couple of earnings calls, we’ve talked a lot about imbalances between demand and capacity for AI, both internally and externally. With the stuff function change in absolute capital dollars you’re projecting now in ’26, can you talk about the pathway to closing the gaps or the need for compute, both internally and externally and how to think about some of the outputs of closing that gap? As the year progresses. And again, the second part would be against that level of spend that you’re now projecting for ’26. How do you think about continuing to find operating efficiencies inside the business to fund those investment growth investments as well?

Sundar Pichai Chief Executive Officer

Thanks, Eric. You are right, and we’ve been supply constrained even as we’ve been ramping up our capacity. Obviously, our CapEx spend this year is an eye towards the future. And you have to keep in mind some of the time horizons are increasing in the supply chain, et cetera. So we are constantly planning for the long term and working towards that. And obviously, how we close the gap this year is a function of what we have done in the prior years, right?

And so there is that time delay to keep in mind. I expect the demand we are seeing across the board across our services, what we need to invest for future work for Google Deep Mine as well as for cloud, I think, is exceptionally strong. And so I do expect to go through the year in a supply-constrained way. And maybe [indiscernible] can touch on the second part.

Unknown Executive

Sure. Thanks, Eric, for the question. I’ve mentioned on 1 of the previous earnings call, our approach to how we look at efficiency and productivity and — we don’t view this as an episodic onetime project or effort, but rather how we run the business on a regular basis and always seek additional opportunities to drive efficiency across the business.

And certainly, with the demand we’re seeing, whether it’s from external customers or across the organization, the more capital we can free up within the organization to invest, the better we can turn this flywheel of making investments to drive future growth. And we’re doing this across the organization. whether it’s within our technical infrastructure, certainly, when we invest at these amounts, we look at how we can ensure that we are the most efficient with every dollar that goes towards our technical infrastructure.

There are scientific innovation that are with part of that process, technical innovation. As you know, and we’ve mentioned before, we primarily focus on construction of our own data centers. We do partner with some external parties on lease on occasion, but most of our data center, we can start ourselves, and we ensure that we do it in the most efficient way in a way that matches our workloads and our needs. We look at coating productivity that Sundar mentioned in the past are about 50% of our codes are written by agents, coating agents, which are then reviewed by our own engineers.

But certainly, it helps our engineers do more, move faster with the current footprint. We look at how we run the business across the organization to using AI within the business to drive daily operations. It can be all the way from the engineering team to small teams within our back office, even within my finance team, for example, we deployed agents within our treasury organization.

We’re deploying agents within how we run, how we pay and reconcile invoice, et cetera. So there are opportunities across the business that we evaluate on a regular basis to ensure we can free up more of that capacity to invest in our future.

The first question from Wall Street is about why agentic is taking off and also YouTube growth.

Brian Nowak Morgan Stanley, Research Division

I have 2 [questions].

One on agenetic, one on YouTube. The first one on agentic. I’d be curious to hear about — as you look back at 2025, where do you think you made the most progress on new types of Agentic commerce products? And then looking at where are you most optimistic to sort of have even more progress in utility for users and your advertisers?

And the second 1 is on YouTube. We’ve seen a lot of the new content creation models like Genie, et cetera. walk us through sort of the Alphabet long-term vision for how Genie and some of these content creation tools could be integrated into YouTube over time?

Sundar Pichai Chief Executive Officer

First, maybe I’ll take the agent take part first. I definitely think 25 was more about laying the foundation getting the models to start being more robust in agent use cases. And obviously, coating is area where the progress was the most felt in areas like commerce, I think we spent the year working with the ecosystem to develop the underlying protocol that’s going to be needed for this agentic world.

So I think the launch of Universal Commerce protocol at NRF in January with a bunch of partners, founding partners, I think, has been super well received. So excited now that we’ve laid the foundation of interoperability on which agent e-commerce can work. And now we are integrating those experiences into Gemini AI mode and so on. So I think this is the year where you will see consumers actually being able to use all of this and I’m excited about the opportunity ahead.

On YouTube, look, super excited by Genie and blown away by spent a lot of time creating this incredible world. I think it’s going to have a wide level of applicability. I think an area where we shine in general is multimodality and representing the real world. And I think Genie is a further step in that direction in terms of building world models. All the innovation we are doing, be it be the Imagine Veo, Lyria, Genie, all that work we bring in into our products and to our cloud customers.

And YouTube is going to be a natural place for creators. We’re going to keep incorporating these tools. Already creators are responding by adopting these, but we do want to put creators at the center of the experience. and that’s very, very important to us. And so it’s for us making sure YouTube is a voice for creator expression is the foundation by which we will approach this.

We’ll provide updates, simply leave this blog open and new updates will automatically post. 

We’re still listening to Alphabet’s conference call. Analyst Q&A should begin momentarily, but so far Wall Street likes what Sundar Pichai had to say about AI growth.

Shares have jumped from ~$330 to $341 during the call.

Here’s what we’re tracking on Google’s conference call (transcript compliments of S&P Capital IQ):

Cloud Growth:

“The launch of Gemini 3 was a major milestone, and we have great momentum. Alphabet’s annual revenues exceeded $400 billion for the first time. This quarter, such continued to accelerate with revenues growing 17%. YouTube’s annual revenues surpassed $60 billion across ads and subscriptions. Cloud significantly accelerated with revenues growing 48% and now on an annual run rate of over $70 billion. Backlog grew by 55% quarter-over-quarter to $240 billion, representing a wide breadth of customers, driven by demand for AI products.

We have over 325 million paid subscriptions across consumer services with strong adoption for Google One and YouTube Premium.”

Here’s Alphabet on AI growth this quarter:

“Next, world-class AI research, including models and tooling. We offer the most extensive model portfolio in the world and lead across text, vision and image to video [indiscernible] leaderboards. Gemini 3 Pro drives the state-of-the-art and reasoning and multimodal understanding. It has seen the fastest adoption of any model in our history.

Since launch, Gemini 3 Pro has consistently processed 3x as many daily tokens on average as 2.5 Pro. Our latest model powers Google antigravity, our new development platform where agents can autonomously plan and execute complex software tasks. It already has more than 1.5 million weekly active users after launching just over 2 months ago.

Our first-party models like Gemini now process over 10 billion tokens per minute via direct API used by our customers, up from $7 billion last quarter. Third, bringing AI to our products and platforms. We are shipping innovation at scale to bring helpful AI features to people everywhere.

In January alone, we have launched personal intelligence in AI mode and search and the Gemini app, introduced new features to Gmail an updated view. — reimagined Chrome as an AI-first agent browser through features like Chrome or to browse. — announced Project Genie, which lets users create and explore interactive world generated in real time using Gen3, our general purpose well model.

And we laid the brown work for shopping in the AI era by introducing a new open standard for agent in commerce. The universal commerce protocol built alongside many retail industry leaders.”

And here’s some details on Alphabet and enterprise adoption:

“In Q4, revenue from products built on our generative AI models grew nearly 400% year-over-year. significantly accelerating from the prior quarter.

Today, more than 120,000 enterprises use Gemini, including AI unions like lovable and open evidence and global enterprises like Airbus and Honeywell.

5 of the top 20 and over 80% of the top 100 SaaS companies use Gemini, including Salesforce and Shopify.

Gemini is becoming the AI engine for the world’s most successful software companies. Leading enterprises are also driving strong demand for our enterprise AI agents. We have sold more than 8 million paid seats of Gemini Enterprise, our enterprise AI platform, to more than 2,800 companies, including BNY and [indiscernible] to streamline knowledge management and automate processes. Gemini Enterprise managed over 5 billion customer interactions in Q4 and growing 65% year-over-year for customers, including Wendy’s, Kroger and Wallboards Group.

Our integration of Gemini in Google Workspace is driving wins with global brands like Schwartz Group and public sector organizations like the U.S. Department of Transportation.”

Alphabet shares are now up 2%, we’ll post analysis of their call shortly.

Remember to stay on this live blog as new updates will post as we listen to their call. 

Alphabet’s earnings call is starting now, we’ll embed it below if you’d like to watch.

Here are some key questions we expect analysts to ask about:

• CapEx justification: How does $175-185 billion in 2026 CapEx translate to revenue growth? Wall Street expected $116 billion—this 55% increase dwarfs even Meta’s aggressive spending.
• Cloud margin sustainability: Can Google Cloud’s 48% growth maintain 31.6% operating margins amid infrastructure buildout?
• Gemini monetization timeline: With 750 million+ monthly users, when does AI Mode drive measurable Search revenue?
• YouTube deceleration concerns: What’s behind the revenue miss despite crossing $60 billion annually?
• Waymo’s path to profitability: The $2.1 billion charge raises questions about autonomous vehicle unit economics.

Bull Case: Why Optimists See Upside

AI monetization proving out: Gemini App reached 750M monthly active users, validating consumer AI adoption at scale. Humana deployed Vertex AI for 20,000+ member advocates, demonstrating revenue conversion beyond hype.

Cloud acceleration continues: Google Cloud grew 48% to $17.7B, outpacing Azure and expanding operating margin to 31.6% despite a $2.1B Waymo charge. The $155B backlog signals sustained momentum.

Earnings growth continues: Net income surged 30% to $34.46B while EPS beat by 4%.

Bear Case: Why Skeptics See Risk

Revenue miss signals demand concerns: Missing revenue estimates by 0.8% raises questions about Search saturation and YouTube growth sustainability.

CapEx guidance increases significantly: 2026 guidance of $175-$185B represents a 233-252% increase over 2024’s $52.5B, reflecting aggressive AI infrastructure investment. Free cash flow declined 1.15% YoY to $24.55B while CapEx jumped 95% YoY.

Valuation metrics: Trading at 34x earnings with 2026 guidance of $175-$185B CapEx.

We just filmed a new episode of our AI Investor Podcast today.

If you’re looking to hear about the stocks that could benefit from Google’s massive capex guidance, give it a listen (and subscribe!) in your favorite podcast player.

We invest in a portfolio of our favorite AI stocks each episode and its absolutely free to subscribe!

Alphabet shares initially saw a large 7% drop, but are now trading down slightly more than 2%.

Expect the entire conference call Q&A to focus on their capital expenditures guidance of $180 billion at the midpoint.

Alphabet is defintiely leaning fully into AI and aiming to pick up massive market share in Google Cloud in 2026.

I have CNBC on in the background while updating this live blog and the guests are laughing in disbelief at Google’s capex number.

Broadcom shares have soared 6% in reaction.

Other stocks with massive exposure to Google capex include TTM Technologies, Celestica, and Lumentum.

They should all be up tomorrow.

Alphabet shares are now down 2%, which is a big reversion from the initial move of a 7% drop.

Cloud revenue was up 48%, which was much better than Wall Street targets.

Once again, the massive jump in capital expenditures this year is the story in Alphabet’s earnings. 

Investors gave Meta Platforms a ‘pass’ on increased capex plans, will they do the same for Alphabet?

Holy moly – Alphabet is projecting $180 billion in capital expenditures in 2026.

Wall Street was expecting $116 billion.

This is an even more dramatic capital expenditure plan than Meta Platforms.

Alphabet earnings beat on the top and bottom line but shares are initially down 7%.

We’ll continue reviewing the earnings to see why shares are selling off so rapidly.

Here’s what Alphabet reported in Q4:

• Revenues: $113.83
• EPS: $2.82

As a reminder, here’s what Wall Street was expecting from Alphabet’s earnings:

Guidance for Q1 was anticipated to be $103.9 billion in revenue with $2.53 in EPS.

Prediction markets are now placing 96% odds that Alphabet will beat earnings tonight with about $170,000 wagered. To win the bet, Alphabet needs to beat $2.64 in GAAP EPS.

Last quarter, the company reported $2.87 earnings.

Investors are less bullish on Qualcomm, which is also reporting tonight. Investors assign the company only an 83% chance of topping Wall Street estimates.

We expect Alphabet earnings shortly after the closing bell and will begin posting live updates and analysis shortly after. Simply stay on this blog and new posts will appear automatically. 

• Blowout earnings beat: Posted $102.3 billion revenue (up 16% YoY) and EPS of $2.87, crushing estimates of $2.27—a 26% surprise. First-ever $100 billion quarter driven by double-digit growth across Search (+15%), YouTube ads (+15%), and Cloud (+34%).
• AI momentum accelerating: Gemini app hit 650 million monthly users with queries tripling from Q2. AI Mode reached 75 million daily users and is already driving incremental Search query growth. Cloud AI revenue grew 200%+ YoY with billions in quarterly AI revenue, and backlog surged 46% sequentially to $155 billion.
• Massive CapEx ramp ahead: Raised 2025 CapEx guidance to $91-93 billion (from $85B) and signaled “significant increase” in 2026 to meet tight AI infrastructure demand. Cloud operating margin expanded to 23.7% despite heavy infrastructure investment.