Alphabet reported Q4 2025 revenue of $113.83B, up 18% year-on-year and above the $111.43B analysts expected. Net income rose 30% to $34.46B. Google Cloud was the standout performer, growing 48% to $17.66B against estimates of $16.18B.
The earnings call revealed the bigger picture: Alphabet plans to significantly increase capital expenditure in 2026, potentially reaching $185B, roughly double recent spending levels. CEO Sundar Pichai acknowledged supply constraints are keeping him awake at night. This tracks with what enterprise leaders already know: the AI infrastructure race has created genuine scarcity in compute capacity.
For APAC CTOs watching hyperscaler dynamics, Google Cloud's 48% growth matters. That's faster than the overall business and suggests enterprise AI workloads are landing somewhere. The question is whether this momentum reflects genuine production deployments or experimentation budgets that might not renew.
The Apple-Google AI partnership came up on the call, with executives declining to provide details even to investors. Bloomberg and The Verge reported conflicting information about whether Gemini-powered Siri would run on Google's servers or on-device. Worth noting: if Google is running inference for iOS users, that's infrastructure spend with a guaranteed customer. If it's on-device, Apple owns more of the value chain.
Alphabet crossed $400B in annual revenue for the first time. The company's willingness to double capex suggests confidence that AI demand is durable, not transient. We'll see. The infrastructure build-out is real, but production use cases at scale remain patchy across most industries.
Three things to watch: whether Cloud growth holds above 40% next quarter, how supply constraints affect Google's ability to deploy capital, and whether enterprises start questioning their own AI infrastructure spending if hyperscalers are this aggressive. The capex arms race has implications beyond the vendors writing the checks.