Alphabet's $175-$185 Billion Capex Plan for 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
0mins
Should l Buy GOOGL?
Source: Fool
- Capex Plan: Alphabet plans to invest $175-$185 billion in capital expenditures in 2026, a substantial investment that will significantly enhance its infrastructure and technological capabilities, driving long-term growth.
- Industry Winners: Alongside Alphabet, Powell Industries and EMCOR are expected to benefit from this investment, likely securing substantial contracts and business opportunities that will further elevate their market positions.
- Market Reaction: On February 5, 2026, Alphabet's stock prices were 2.42% and 2.46%, reflecting investor optimism regarding its future growth potential, which may drive stock prices higher.
- Strategic Implications: This capex plan not only demonstrates Alphabet's confidence in future technological advancements but may also set industry trends, prompting other companies to increase investments to maintain competitiveness.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy GOOGL?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for GOOGL is 338.25 USD with a low forecast of 279.00 USD and a high forecast of 390.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
27 Buy
7 Hold
0 Sell
Strong Buy
Current: 331.250
Low
279.00
Averages
338.25
High
390.00
Current: 331.250
Low
279.00
Averages
338.25
High
390.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Alphabet Plans Significant Increase in AI Investments
- Stock Price Fluctuation: Alphabet's stock closed at $331.25, down 0.54%, as investors assessed the company's plan to increase AI capital expenditures to approximately $180 billion by 2026, indicating market concerns over future cash flow and AI growth.
- Surge in Trading Volume: Trading volume reached 87.1 million shares, about 136% above the three-month average of 36.8 million shares, reflecting heightened investor interest in the company's future prospects.
- Earnings Beat Expectations: In Q4, Alphabet reported sales and earnings per share growth of 18% and 31%, respectively, surpassing Wall Street's consensus, with Google Search and YouTube showing steady growth rates of 17% and 9% each.
- Cloud Business Highlight: The cloud backlog surged 55% sequentially, more than doubling from Q4 2024, indicating strong demand in the cloud services sector, while management's confidence in AI-related spending continues to grow.
See More
Google and Meta Shift the Narrative on Broadcom's AI as Stock Prices Decline
Stock Performance: Broadcom's shares have fallen 10% in 2026, continuing a negative trend from 2025, but the outlook remains positive due to increased spending in the hyperscaler sector.
Future Spending Projections: Alphabet, Broadcom's largest chip partner, expects to spend between $175 billion and $185 billion on capital expenditures in 2026, significantly higher than previous estimates, which could boost Broadcom's revenue.
Partnership with Meta: Broadcom is likely to benefit from its partnership with Meta, which is expected to increase its spending on AI-related projects, further supporting Broadcom's growth outlook.
Market Positioning: Despite recent declines, Broadcom shares are seen as undervalued, with analysts suggesting a potential upside of around 41%, indicating a favorable investment opportunity.
See More
Microsoft's Cloud Computing Drives Market Performance Potential
- Stock Price Pressure: Microsoft has had a rough start to 2026, with its stock down 11% year-to-date, including a 10% drop in a single day following its second-quarter earnings report, complicating its ability to outperform the market this year.
- Cloud Growth Potential: Azure, Microsoft's cloud computing division, achieved a remarkable 39% revenue growth in Q2 2025, while the overall growth rate was 17%, underscoring the central role of cloud computing in the company's strategy.
- Competitive Advantage Analysis: Although Microsoft does not separately disclose Azure's profits, its operating margins are estimated to be between 25% and 35%, which may be lower than Microsoft's overall operating margin of 47%, compared to competitors AWS and Google Cloud.
- Future Outlook: With the ongoing demand for cloud computing, Microsoft is positioned to achieve stronger market performance in the coming years through its Azure platform, despite current stock price pressures, as the potential of cloud computing remains a key to its strategic success.
See More
Microsoft's Azure Cloud Computing Grows Rapidly
- Azure Growth Momentum: Microsoft's Azure cloud computing division achieved a remarkable 39% revenue growth in Q2 2025, highlighting its critical role in the company's overall 17% growth, indicating that cloud computing will continue to drive Microsoft's future development.
- Market Competition Analysis: Although Microsoft does not disclose Azure's financials separately, its operating margins are likely between 25% and 35%, compared to competitors Amazon AWS and Google Cloud's margins of 35% and 24%, respectively, which may exert some pressure on overall profitability.
- Investment Opportunity: Microsoft's expansion in the cloud computing sector presents a significant market opportunity, especially as demand for AI surges, leading enterprise clients to prefer renting data centers rather than building them, thus fueling Azure's rapid growth.
- Stock Market Performance Challenges: Despite Microsoft's stock price dropping 11% at the start of 2026, Azure's strong growth could help it outperform the market in the future, particularly as the broader market has only risen by 1%, providing Microsoft with a chance to regain its market position.
See More
Tesla and Waymo's Divergent Approaches to Autonomous Driving
- Elevated Safety Standards: Waymo's VP Srikanth Thirumalai stated in an interview that the standards for autonomous driving should exceed human capabilities, emphasizing that safety is paramount, with future efforts focused on reducing sensor costs and improving software quality to ensure product safety.
- Sensor System Optimization: Currently, Waymo employs a comprehensive system with 29 cameras, 5 lidars, and 6 radars to enhance AI perception, planning to reduce the number of sensors in future robotaxi models while iterating and innovating to lower costs and improve software performance.
- Tesla's AI Perspective: Tesla's VP of AI, Ashok Elluswamy, emphasized at the ScaledML Conference that autonomous driving should rely on cameras rather than sensors, arguing that the challenge lies in AI capabilities rather than sensor technology, highlighting the importance of information extraction.
- Ongoing Industry Debate: Despite differing views on autonomous driving technology, both Waymo and Tesla acknowledge the challenges in achieving fully safe autonomous driving, indicating that the debate within the industry continues to evolve.
See More
Federal Judge Orders Elon Musk to Testify in USAID Case
- Musk Ordered to Testify: A federal judge has ruled that Elon Musk must testify regarding his role in dismantling USAID, rejecting his legal team's attempt to avoid questioning, which could impact Musk's reputation and future business endeavors.
- Alphabet Beats Earnings Estimates: Alphabet reported fourth-quarter revenue of $113.83 billion, surpassing the Street consensus estimate of $111.31 billion, with earnings per share of $2.82 exceeding expectations of $2.63, indicating strong performance in advertising and cloud services that may drive stock price increases.
- Amazon Delivery Milestone: Amazon announced it delivered over 13 billion items globally in 2025, with more than 8 billion items reaching U.S. Prime members the same or next day, a speed enhancement that will further strengthen its competitive position in the e-commerce market.
- Tesla's New Model Launch: Tesla unveiled a new All-Wheel Drive variant of the Model Y in the U.S. and Puerto Rico following Elon Musk's announcement of discontinuing the Model S and X, which could attract more consumers and enhance market share.
See More
Alphabet Plans Significant Increase in AI Investments
- Stock Price Fluctuation: Alphabet's stock closed at $331.25, down 0.54%, as investors assessed the company's plan to increase AI capital expenditures to approximately $180 billion by 2026, indicating market concerns over future cash flow and AI growth.
- Surge in Trading Volume: Trading volume reached 87.1 million shares, about 136% above the three-month average of 36.8 million shares, reflecting heightened investor interest in the company's future prospects.
- Earnings Beat Expectations: In Q4, Alphabet reported sales and earnings per share growth of 18% and 31%, respectively, surpassing Wall Street's consensus, with Google Search and YouTube showing steady growth rates of 17% and 9% each.
- Cloud Business Highlight: The cloud backlog surged 55% sequentially, more than doubling from Q4 2024, indicating strong demand in the cloud services sector, while management's confidence in AI-related spending continues to grow.
See More
Google and Meta Shift the Narrative on Broadcom's AI as Stock Prices Decline
Stock Performance: Broadcom's shares have fallen 10% in 2026, continuing a negative trend from 2025, but the outlook remains positive due to increased spending in the hyperscaler sector.
Future Spending Projections: Alphabet, Broadcom's largest chip partner, expects to spend between $175 billion and $185 billion on capital expenditures in 2026, significantly higher than previous estimates, which could boost Broadcom's revenue.
Partnership with Meta: Broadcom is likely to benefit from its partnership with Meta, which is expected to increase its spending on AI-related projects, further supporting Broadcom's growth outlook.
Market Positioning: Despite recent declines, Broadcom shares are seen as undervalued, with analysts suggesting a potential upside of around 41%, indicating a favorable investment opportunity.
See More
Microsoft's Cloud Computing Drives Market Performance Potential
- Stock Price Pressure: Microsoft has had a rough start to 2026, with its stock down 11% year-to-date, including a 10% drop in a single day following its second-quarter earnings report, complicating its ability to outperform the market this year.
- Cloud Growth Potential: Azure, Microsoft's cloud computing division, achieved a remarkable 39% revenue growth in Q2 2025, while the overall growth rate was 17%, underscoring the central role of cloud computing in the company's strategy.
- Competitive Advantage Analysis: Although Microsoft does not separately disclose Azure's profits, its operating margins are estimated to be between 25% and 35%, which may be lower than Microsoft's overall operating margin of 47%, compared to competitors AWS and Google Cloud.
- Future Outlook: With the ongoing demand for cloud computing, Microsoft is positioned to achieve stronger market performance in the coming years through its Azure platform, despite current stock price pressures, as the potential of cloud computing remains a key to its strategic success.
See More
Microsoft's Azure Cloud Computing Grows Rapidly
- Azure Growth Momentum: Microsoft's Azure cloud computing division achieved a remarkable 39% revenue growth in Q2 2025, highlighting its critical role in the company's overall 17% growth, indicating that cloud computing will continue to drive Microsoft's future development.
- Market Competition Analysis: Although Microsoft does not disclose Azure's financials separately, its operating margins are likely between 25% and 35%, compared to competitors Amazon AWS and Google Cloud's margins of 35% and 24%, respectively, which may exert some pressure on overall profitability.
- Investment Opportunity: Microsoft's expansion in the cloud computing sector presents a significant market opportunity, especially as demand for AI surges, leading enterprise clients to prefer renting data centers rather than building them, thus fueling Azure's rapid growth.
- Stock Market Performance Challenges: Despite Microsoft's stock price dropping 11% at the start of 2026, Azure's strong growth could help it outperform the market in the future, particularly as the broader market has only risen by 1%, providing Microsoft with a chance to regain its market position.
See More
Tesla and Waymo's Divergent Approaches to Autonomous Driving
- Elevated Safety Standards: Waymo's VP Srikanth Thirumalai stated in an interview that the standards for autonomous driving should exceed human capabilities, emphasizing that safety is paramount, with future efforts focused on reducing sensor costs and improving software quality to ensure product safety.
- Sensor System Optimization: Currently, Waymo employs a comprehensive system with 29 cameras, 5 lidars, and 6 radars to enhance AI perception, planning to reduce the number of sensors in future robotaxi models while iterating and innovating to lower costs and improve software performance.
- Tesla's AI Perspective: Tesla's VP of AI, Ashok Elluswamy, emphasized at the ScaledML Conference that autonomous driving should rely on cameras rather than sensors, arguing that the challenge lies in AI capabilities rather than sensor technology, highlighting the importance of information extraction.
- Ongoing Industry Debate: Despite differing views on autonomous driving technology, both Waymo and Tesla acknowledge the challenges in achieving fully safe autonomous driving, indicating that the debate within the industry continues to evolve.
See More
Federal Judge Orders Elon Musk to Testify in USAID Case
- Musk Ordered to Testify: A federal judge has ruled that Elon Musk must testify regarding his role in dismantling USAID, rejecting his legal team's attempt to avoid questioning, which could impact Musk's reputation and future business endeavors.
- Alphabet Beats Earnings Estimates: Alphabet reported fourth-quarter revenue of $113.83 billion, surpassing the Street consensus estimate of $111.31 billion, with earnings per share of $2.82 exceeding expectations of $2.63, indicating strong performance in advertising and cloud services that may drive stock price increases.
- Amazon Delivery Milestone: Amazon announced it delivered over 13 billion items globally in 2025, with more than 8 billion items reaching U.S. Prime members the same or next day, a speed enhancement that will further strengthen its competitive position in the e-commerce market.
- Tesla's New Model Launch: Tesla unveiled a new All-Wheel Drive variant of the Model Y in the U.S. and Puerto Rico following Elon Musk's announcement of discontinuing the Model S and X, which could attract more consumers and enhance market share.
See More
