Alphabet Inc. (NASDAQ: GOOGL), the parent company of Google, saw its Class A shares close at $307.38 on Feb. 26, down 1.76% or $5.52 from the previous session's $312.90. The decline followed broader market pressures and investor concerns over the company's aggressive capital expenditure plans for artificial intelligence infrastructure.

Google has dropped initiatives aimed at making its workplace demographics better represent its diverse range of users, citing recent US presidential actions and court decisions
AFP

The stock has traded in a 52-week range of $140.53 to $349.00, with the recent high reached in early February 2026. Alphabet's market capitalization hovers around $3.72 trillion, reflecting its position as one of the world's most valuable companies. Trading volume on Feb. 26 reached approximately 36 million shares, above average amid heightened interest in tech sector developments.

Alphabet's most recent financial results, released Feb. 4 for the fourth quarter and full year 2025, showcased robust performance. Consolidated revenues climbed 18% year-over-year to $113.8 billion, surpassing analyst expectations of around $111 billion. Earnings per share came in at $2.82, beating estimates of $2.57 to $2.64. For the full year, revenues exceeded $400 billion for the first time, with net income rising 30% to $132.2 billion and diluted EPS at $10.81.

Google Services, the core advertising and consumer businesses, drove much of the growth with revenues up 14% to $95.9 billion. Google Search and other properties grew 17%, while YouTube ads and subscriptions contributed significantly, pushing the platform's annual revenues past $60 billion. Google subscriptions, platforms and devices increased 17%, bolstered by strong adoption of Google One and YouTube Premium, now totaling over 325 million paid subscriptions.

Google Cloud continued its rapid expansion, with revenues surging 48% to $17.7 billion in the quarter. The segment benefited from surging demand for AI infrastructure and enterprise solutions on Google Cloud Platform. CEO Sundar Pichai highlighted the momentum in his earnings statement, noting that first-party models like Gemini now process over 10 billion tokens per minute via API, and the Gemini app has reached more than 750 million monthly active users.

Pichai emphasized AI's role in expanding search usage, with features like AI Overviews driving more complex queries and longer sessions. "AI continues to drive an expansionary moment" in search, he said, while cloud's annual run rate surpassed $70 billion.

The earnings beat initially lifted shares, but forward guidance tempered enthusiasm. Alphabet projected 2026 capital expenditures between $175 billion and $185 billion, nearly double prior-year levels, primarily to fuel AI data centers, custom Tensor Processing Units (TPUs) and related infrastructure. The high-end figure raised concerns about potential margin pressure and free cash flow impacts in the near term, contributing to recent pullbacks.

Analysts remain largely bullish. Consensus price targets sit around $344 to $376, with firms like Scotiabank, KeyCorp and others issuing upgrades citing AI advantages. The stock carries a "Buy" rating from most covering analysts, who point to Alphabet's comprehensive AI stack—including leading large language models, custom chips and vast cloud resources—as a competitive edge over rivals.

Recent developments underscore Alphabet's AI push. In late February, the company integrated its robotics software firm Intrinsic—formerly an Alphabet "Other Bet"—into Google to accelerate physical AI for industrial automation. Intrinsic will leverage Gemini models and Google Cloud to make robotics more accessible for manufacturing.

Alphabet also issued a 100-year bond in February to help fund its AI ambitions, drawing strong demand from institutional investors despite the long maturity. The move signals confidence in long-term growth while borrowing at favorable rates amid heavy spending plans.

Employee and ethical discussions have emerged around AI applications. More than 100 Google AI workers signed a letter in February urging "red lines" on military uses of Gemini, including restrictions on surveillance of U.S. citizens and autonomous weapons without human oversight. The letter echoes similar concerns at other AI firms amid Pentagon collaborations.

On the product front, Google launched a free AI Professional Certificate for U.S. small businesses and workers, offering training in AI skills like content creation and data analysis to address workforce gaps.

Alphabet's next earnings report is expected April 23, covering the first quarter of 2026. Analysts forecast EPS around $2.67 on revenues near $106 billion to $113 billion. The company maintains a strong balance sheet, with ongoing share repurchases and a modest dividend initiated in recent years.

Despite short-term volatility from capex concerns, Alphabet's trajectory reflects its evolution into an AI powerhouse. From search dominance to cloud acceleration and robotics integration, the company continues investing aggressively to capture emerging opportunities in generative AI, enterprise solutions and beyond.

Investors weigh the balance between near-term spending pressures and long-term revenue potential from AI monetization across search, cloud and new frontiers. As Alphabet navigates this pivotal phase, its stock performance may hinge on execution in scaling AI infrastructure while sustaining core growth engines.