Google-parent Alphabet Inc. boosted its capital expenditure plans for 2025 to keep up with the demand of its cloud customers. The company made this announcement along with its quarterly results.Alphabet now intends to spend $85 billion in 2025, higher than the earlier projection of $75 billion, which was also higher than what analysts had anticipated.
Although Alphabet’s results were a beat on expectations, the stock fell in extended trading initially due to the increased spending plans, but recovered soon after CEO Sundar Pichai explained that these investments were necessary.
“Our AI infrastructure investments are crucial to meeting the growth in demand from cloud customers,” he said on the earnings call. “We are seeing significant demand for our comprehensive AI product portfolio,” he added.
Alphabet reported $96.43 billion in revenue for the quarter, higher than estimates of $94 billion, while its EPS of $2.31 was also a beat on the $2.18 billion expected.Revenue from both core verticals, YouTube Advertising ($9.8 billion) and Google Cloud ($13.62 billion) were a beat on expectations as well.Google remains in third place in the cloud market, after Microsoft and Amazon.com Inc., but the company’s prowess in AI has helped it score client wins. The unit is widely viewed as Alphabet’s strongest source of growth as the main search business matures.Alphabet has been aggressively expanding the operations of Waymo, which may soon face increased competition as Tesla ramps up its robotaxi business. Earlier this month, Waymo more than doubled its service area in Austin, Tesla Inc.’s home base, and said it would start collecting data in New York City in pursuit of a permit for testing.Shares of Alphabet recovered from the earlier drop in extended trading to end that session 1.7% higher. The stock has remained flat so far in 2025.(With Inputs From Agencies.)
