Google Plans to Double Capex Spending as Cloud Growth Soars 48%
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By Danny Vena, CPA – Feb 4, 2026 at 6:24PM ESTKey PointsAlphabet's quarterly results beat expectations across the board, led by strong cloud growth.The company continues to see demand for cloud and AI outstrip supply and is spending heavily to capitalize on the opportunity.Despite impressive gains over the past year, Alphabet stock is still attractively priced. These 10 Stocks Could Mint the Next Wave of Millionaires ›NASDAQ: GOOGLAlphabetMarket Cap$4.1TToday's Changeangle-down(-1.96%) $6.67Current Price$333.04Price as of February 4, 2026 at 4:00 PM ETThe search leader's artificial intelligence (AI) strategy is paying off.Questions about the future of artificial intelligence (AI) have surged in recent months. The biggest question among investors is whether companies can recoup the massive investments they're making to capitalize on demand for AI. Amid this uncertainty, Alphabet (GOOGL 1.96%) (GOOG 2.16%) sought to answer that question when it reported its quarterly results after the market close on Wednesday. What became immediately apparent is that demand for AI continues to fuel rapid cloud growth, and Alphabet plans to continue heavy investment to capitalize on the opportunity. Image source: Getty Images. AI strategy is paying off For the fourth quarter, revenue of $113.8 billion jumped 18% year over year, and 17% in constant currency. Operating margin held steady at 32%, driving diluted earnings per share (EPS) up 31% to $2.82. To give those numbers context, analysts' consensus estimates called for revenue of $111.48 billion and EPS of $2.64, so Alphabet cleared both hurdles with room to spare. Google search and the related advertising account for the lion's share of Alphabet's revenue. Fears that AI could funnel ad revenue away led investors to watch the segment results closely. Google's search revenue climbed 17% year over year, which was partially offset by weakness at YouTube, which grew about 9%. In all, Google ad revenue grew 14%, helping quell those concerns for now. The other area of particular interest to investors in Google Cloud which also serves as the repository for much of the company's AI strategy. Continuing demand for AI services was on full display, as cloud revenue of $17.7 billion surged 48%, accelerating from 34% growth in the third quarter. This far outpaced Microsoft's Azure Cloud growth of 39%, showing that Google is gaining on its rival. ExpandNASDAQ: GOOGLAlphabetToday's Change(-1.96%) $-6.67Current Price$333.04Key Data PointsMarket Cap$4.1TDay's Range$328.52 - $343.3152wk Range$140.53 - $349.00Volume70MAvg Vol35MGross Margin59.18%Dividend Yield0.24% Perhaps more telling is the segment's operating margins, which climbed to 30.1%, up from 23.7% in Q3. This shows that Google Cloud is leveraging its assets to drive more profits to the bottom line. During the earnings call, Alphabet said it sold more than 8 million paid seats of Gemini Enterprise, and noted that the Gemini app now has more than 750 million monthly active users. Furthermore, it's seeing significant increases in user engagement since the release of Gemini 3. As a result, demand for cloud and AI is currently outstripping supply. It should come as no surprise, then, that Alphabet announced plans to boost its investment in cloud and AI. As such, it expects to roughly double its capital expenditures (capex), spending between $175 billion and $180 billion in 2026, up from roughly $91 billion last year. Alphabet is sitting in the sweet spot, with accelerating cloud growth and unmet demand. Investors have rewarded the company by driving its share price up 65% over the past year. Despite its success, the search leader is still attractively priced, selling for less than 30 times forward earnings. That makes Alphabet stock a buy.Read NextFeb 4, 2026 •By Stefon WaltersThis Tech Stock Could Turn $1,000 Into $18,000 in 21 YearsFeb 4, 2026 •By Daniel SparksIs Alphabet Stock a Buy as Google Cloud Revenue Soars?Feb 4, 2026 •By Keith Speights2 Top Quantum Computing Stocks to Buy in FebruaryFeb 1, 2026 •By Keithen Drury3 AI Stocks to Buy in 2026 and Hold ForeverJan 31, 2026 •By Adam SpataccoOpenAI and Anthropic Now Rival Public Software Giants for Revenue.
That Makes These 3 Stocks Strong Buys for 2026.Jan 31, 2026 •By Geoffrey SeilerWhy This Artificial Intelligence (AI) Stock Is Gaining Attention From Institutional InvestorsAbout the AuthorDanny Vena, CPA, is a contributing Motley Fool technology analyst specializing in artificial intelligence, cloud computing, semiconductors, software, cybersecurity, and consumer electronics. He is a Certified Public Accountant and previously worked as a controller and accountant across small and midsize businesses. Danny also served 13 years in the U.S. Army. He holds a bachelor’s degree in accounting from the University of Phoenix.TMFLifeIsGoodX@dannyvenaStocks MentionedAlphabetNASDAQ: GOOGL$333.04 (0.02%) $6.67MicrosoftNASDAQ: MSFT$414.55 (+0.01%) $+3.34AlphabetNASDAQ: GOOG$333.60 (0.02%) $7.10*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.