US Stock Market Move | Capital expenditure guidance for 2026 doubled, Alphabet Inc. Class A (GOOGL.US) dropped over 4% in pre-market trading.

On Thursday, Alphabet Inc. Class C (GOOGL.US) fell more than 4% in pre-market trading, with the stock price now at $318.72, up 65% in the past year. On the news front, the company's quarterly revenue exceeded expectations and it has announced an ambitious capital expenditure plan, far exceeding expectations, to build the data centers and infrastructure needed to lead the artificial intelligence era. Overall revenue in Q4 increased by 18% to $113.8 billion, surpassing the expected $111.5 billion, mainly due to accelerated growth in Alphabet Inc. Class Cs service business and the growing importance of Alphabet Inc. Class C's cloud business. Q4 revenue (excluding partner revenue) was $97.23 billion, higher than analysts' average expectation of $95.2 billion. Q4 net profit reached $34.46 billion, an increase of nearly 30% from the previous year. Operating profit increased by 16% to $35.9 billion, with an operating profit margin remaining stable at 32%. Earnings per share were $2.82, higher than the expected $2.63. Investors are closely watching Alphabet Inc. Class C's spending and returns in the field of artificial intelligence. Alphabet Inc. Class C stated that its capital expenditures in 2026 will reach between $175 billion and $185 billion, significantly higher than the expected $119.5 billion. Alphabet Inc. Class C's Chief Financial Officer Anat Ashkenazi told analysts during a conference call that most of the capital expenditures will be used to invest in Alphabet Inc. Class C's DeepMind artificial intelligence computing capabilities and to meet the "huge demand from cloud customers." In addition, some of the funds will be used for strategic investments in the company's "other investments" sector, as well as to improve returns for advertisers.