Alphabet Raises CapEx Guidance to $175–185B, Shares Slip Almost 3%
Alphabet unveiled a $175–185 billion CapEx plan, about 50% above analyst expectations of $116.5 billion, leading shares to fall nearly 3% after a strong quarterly report. Jim Cramer highlighted the firm’s AI strengths in Google Cloud, Gemini, YouTube and Waymo but said the top Mag Seven stock was likely due for a breather.
1. Soaring CapEx Guidance
Alphabet’s board approved a capital expenditure increase to $175–185 billion for the upcoming fiscal year, significantly above the $116.5 billion consensus. The elevated spending targets underscore management’s commitment to AI infrastructure, cloud expansion and safety initiatives within YouTube and Waymo.
2. Stock Reaction
Investors responded to the higher-than-expected CapEx outlook by selling shares, which slipped almost 3% in the two trading sessions following the announcement. This pullback came despite the company reporting revenue and earnings that topped internal projections.
3. Cramer’s Perspective
Jim Cramer praised Alphabet as a “house of great businesses,” citing leadership across Google Cloud, Gemini AI, YouTube and autonomous unit Waymo. However, he advised that the stock, the strongest Mag Seven performer last year, was due for a consolidation phase after its rapid run-up.