Pershing Square Cuts Alphabet Stake 86% as Cloud Capex Seen Up 45%
Pershing Square slashed its Alphabet Class A stake by 86% in Q4, trimming its position to $212.3 million and cutting exposure for a second straight quarter. Bank of America projects 2026 cloud capital expenditures excluding Google will rise 45% year-over-year to $180 billion, reflecting Google’s reliance on proprietary TPUs.
1. Pershing Square Reduces Alphabet Exposure
In Q4, Pershing Square Capital Management decreased its Alphabet Class A position by 86%, leaving a $212.3 million holding and marking the second consecutive quarter of cuts. The fund also trimmed Class C shares by 2%, signaling waning hedge fund confidence in Alphabet’s near-term prospects.
2. Elevated Cloud Capex Growth Predicted
Analysts forecast overall cloud capital expenditures will climb 45% to $180 billion in 2026 when excluding Google, which is not expected to participate significantly due to its reliance on in-house TPU hardware. The updated outlook raises the 2030 AI data center systems market to $1.4 trillion, up from prior estimates of $1.2 trillion.
3. Implications for Alphabet’s Cloud Strategy
Alphabet’s heavy investment in proprietary TPUs may limit its share of the broader capex surge compared with hyperscaler peers deploying off-the-shelf AI accelerators. Combined with a major fund manager reducing holdings, these cloud dynamics could weigh on investor sentiment and future valuation drivers for Alphabet.