2026 Capital Expenditure Guidance Doubles, Google A(GOOGL.US) Stock Falls Over 4% in Pre-Market

K-LinePoet · 2026-02-24T13:59:33+00:00

Google's Q1 revenue exceeded expectations, reaching $113.8 billion, with net profit increasing by nearly 30%. Despite the stock price dropping over 4%, the company raised capital expenditures to $175 billion to $185 billion, primarily for artificial intelligence and cloud computing investments.

K-LinePoet

2026-02-24 13:59:33

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Thursday, Google A (GOOGL.US) fell over 4% in pre-market trading. The stock has gained 65% over the past year and is currently at $318.72. On the news front, the company reported quarterly revenue exceeding expectations and announced an ambitious capital expenditure plan, far surpassing forecasts, to leverage its growth momentum in building data centers and infrastructure needed for the AI era. Q4 total revenue grew 18% to $113.8 billion, beating the expected $111.5 billion, mainly driven by accelerated growth in Google services and the increasing importance of Google Cloud. Q4 sales (excluding partner revenue) were $97.23 billion, above the analyst average forecast of $95.2 billion. Q4 net profit reached $34.46 billion, nearly 30% higher than the previous year. Operating profit increased 16% to $35.9 billion, with an operating margin maintained at a stable 32%. Earnings per share were $2.82, higher than the expected $2.63.

Investors are highly focused on Google’s spending and returns in the AI sector. Google stated that capital expenditures in 2026 will reach $175 billion to $185 billion, well above the forecast of $119.5 billion. Google CFO Anat Ashkenazi told analysts during the conference call that most of the capital spending will be used to invest in Google DeepMind’s AI computing capabilities and to meet the “huge cloud customer demand.” Additionally, some funds will be allocated to strategic investments in the company’s “Other Bets” segment and to enhance advertiser returns.

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