Alphabet’s share price fell over six percent following management’s projection of $175 billion to $185 billion in capital expenditures for the coming year, far above consensus estimates near $115 billion. The bulk of the planned spending is earmarked for expanding data-center capacity to support artificial-intelligence workloads. Despite the sell-off, the company reported fourth-quarter earnings of $2.82 per share on revenue of $97.23 billion, marking double-digit year-over-year growth in both metrics. Options volume spiked, with more than 285,000 calls traded — approximately triple the average intraday level — as traders positioned for potential volatility.

Google Cloud posted a 48 percent increase in fourth-quarter revenue to $17.7 billion, more than doubling its operating income compared to the prior year. The firm highlighted user adoption of its Gemini AI application, which now reaches 750 million monthly active users, as a key growth driver. While elevated infrastructure investment could pressure near-term margins, analysts credited the cloud unit’s rapid margin expansion for underpinning bullish sentiment, with seventeen upward revisions to price targets coming after the report.

On February 5, 2026, UBS raised its 12-month price target for Alphabet to $348, representing a 4.5 percent increase from prevailing levels at the time of the update. The bank cited accelerated growth in digital advertising and cloud services, driven by the company’s AI leadership, as justification for the new target. UBS noted that the consensus target of $343.61 implies a premium of over six percent to recent share levels, and that the company’s market capitalization exceeds $4 trillion, reflecting its dominant position in search and enterprise computing.

The U.S. Department of Justice filed a cross-appeal challenging a district court ruling that declined to force Google to divest its Chrome browser or end its default search agreement with Apple. The DOJ is seeking remedies including separation of the AdX advertising exchange and restrictions on exclusive distribution contracts. This renewed legal pressure comes as the company prepares to release its quarterly results, maintaining regulatory overhang that investors will monitor alongside operational developments.