Capital expenditures—capex, meaning the big-ticket purchases that fund the data centers, servers, and power infrastructure undergirding the AI race—is fueling record-high, multi-trillion dollar tech valuations when investors think the spending is warranted. But companies get punished when investors worry they might not see returns that justify hundreds of billions in spending.
Alphabet is the latest example. During its Wednesday fourth quarter earnings call, CEO Sundar Pichai and chief financial officer Anat Ashkenazi revealed that the $4 trillion tech giant will spend between $175 billion to $185 billion in capex in 2026, possibly doubling the $91.4 billion it spent in 2025 and a far cry from the $52.5 billion spent as recently as 2024. In Q4 alone, Alphabet’s capex investment reached $27.9 billion.
