Alphabet’s Aggressive $185B Capex Plan Sparks Analyst Reactions Amid Strong Q4 Performance
Alphabet Inc. (GOOGL) stunned markets with plans to nearly double capital expenditures to $185 billion by 2026, dwarfing consensus estimates of $120 billion. The tech giant's audacious spending blueprint follows a robust fourth quarter where search revenue grew 17% YoY and Google Cloud revenue skyrocketed 48%.
Piper Sandler responded by raising Alphabet's price target from $365 to $395, maintaining an Overweight rating. The Optimism stems from Google Cloud's explosive backlog growth - surging from $155 billion to $240 billion in just three months, signaling substantial future revenue potential.
Morgan Stanley struck a cautionary note, projecting Alphabet's free cash flow per share could plummet 58% in 2026 and up to 80% in 2027. The spending spree mirrors Meta's planned $135 billion AI investment, while Microsoft and Amazon face mounting pressure to justify their cloud infrastructure expenditures.
