#How did Alphabet perform in its Q4 2025 earnings report?
Alphabet announced its fourth-quarter earnings for 2025, revealing results that exceeded Wall Street's predictions. The company reported a revenue of $113.8 billion along with earnings per share of $2.82, surpassing analyst expectations of $111.2 billion in revenue and $2.57 per share.
Despite these strong results, Alphabet's stock declined significantly by up to 7% in early trading on Thursday. The stock initially opened at approximately $312 but managed to recover to around $322 by midday. Nonetheless, this figure remains substantially lower than its previous close of $332 prior to the earnings report.
#What are the implications of Alphabet's capital expenditure forecast?
The sudden selloff appears linked to Alphabet's projected capital expenditures ranging from $175 billion to $185 billion for 2026. This forecast has prompted worries among investors that the company’s spending on AI infrastructure might exceed its monetization capabilities in the near term.
#How is the analyst community reacting to Alphabet's results?
Despite the immediate negative market reaction, analysts have responded positively to Alphabet's performance. The strong quarterly results and the ongoing rollout of the company's Gemini AI model across its various products—including Search, Ads, and Workspace—have encouraged several analysts to raise their price targets for the stock. Notably, JPMorgan increased its target from $385 to $395, while Barclays raised theirs from $315 to $360. Other notable adjustments included Canaccord, which now targets $415 up from $390, and KeyBanc, increasing its target to $370. Pivotal Research has the highest target at $420, up from $400. Similarly, Piper Sandler raised its forecast to $395 from $365.
#What does the future hold for Alphabet?
While the short-term stock reaction was disappointing, the overall outlook on Wall Street tends to remain positive. As Alphabet continues to invest in its AI technologies and cloud sector, it stands poised for long-term growth. Investors are encouraged to keep an eye on Alphabet's strategic advancements in these areas, as they hint at potential sustained profitability down the line.