Alphabet’sGOOGL

business is booming, but Wall Street’s more focused on the bill. The Google parent crossed $400B in annual revenue for the first time, powered by steady search demand and the launch of its Gemini 3 AI model. Q4 revenue hit $113.8B, while full-year 2025 sales climbed 15% year-over-year. But investors weren’t cheering — Alphabet revealed plans to nearly double its capital spending, targeting $175B–$185B in capex for 2026.

• Google Cloud revenue jumped 48% in Q4, blowing past estimates of 35.2%, thanks to major enterprise AI infrastructure deals with MetaMETA
  , Anthropic, OpenAI, and AppleAAPL
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• YouTube also had a strong year, with ad and subscription revenue topping $60B, while the Gemini app surpassed 750M monthly active users.

The AI arms race heats up: Alphabet isn’t the only one ramping up AI spending — Amazon Web ServicesAMZN

, Microsoft’s AzureMSFT

, and Meta together are on track to pour more than $500B into AI this year. That escalation has sharpened competition — after Gemini 3 gained traction, OpenAI CEO Sam Altman reportedly sounded a “code red,” while Alphabet’s Gemini-powered Siri deal with Apple expands its reach to 2.5B devices, and AI Overviews now serve over 2B users. In this phase of the race, AI advantage is shifting from who builds best to who can fund it the longest.