Google parent Alphabet reported fourth-quarter earnings that exceeded Wall Street expectations, posting record full-year revenue above $400 billion for the first time.
Despite the strong results, shares slipped in after-hours trading as investors assessed plans for a sharp increase in AI-related capital spending.
Alphabet said fourth-quarter revenue rose 18% year over year to nearly $114 billion, beating analyst forecasts. Net income climbed 30% to $34.5 billion, while earnings per share increased 31% to $2.82, also ahead of estimates.
For full-year 2025, the company reported revenue of $403 billion and profit of about $132 billion, driven by continued growth in advertising, cloud services, and subscriptions.
Google Cloud reached a $70 billion annual run rate, with fourth-quarter revenue nearing $18 billion, up 48% from a year earlier. YouTube revenue exceeded $60 billion across advertising and subscriptions.
Alphabet highlighted momentum in artificial intelligence, noting its Gemini AI app surpassed 750 million users following the November launch of Gemini 3, adding roughly 100 million users.
Investor attention shifted to spending plans. Alphabet said it expects capital expenditures of $175 billion to $185 billion in 2026, nearly double the $91 billion to $93 billion spent in 2025, reflecting aggressive investment in AI models and data center infrastructure.
Shares initially jumped more than 4% in after-hours trading before reversing course, falling about 1.2% to trade near $328 after hours after closing around $333 in the regular session.
