Alphabet Stock Forecast: Can GOOGL Deliver Nearly 40% Gains in 12 Months?

Alphabet (GOOGL) stock has cooled off a bit after a strong rally over the past year. Notably, the launch of Gemini 3 and the significant revenue opportunity from its internal Tensor Processing Units (TPUs) gave its share price a significant boost. However, geopolitical tensions in the Middle East have contributed to market caution, while concerns about the company’s rising capital expenditures have stalled GOOGL’s upward momentum.

Alphabet is investing aggressively as it expands its artificial intelligence (AI) capabilities and underlying infrastructure to meet growing demand. Management has indicated that capital expenditures are projected to rise significantly, reaching between $175 billion and $185 billion in 2026. This marks a substantial increase from the $91.4 billion deployed in 2025, with spending expected to accelerate throughout the year. Such elevated investment levels are likely to place pressure on margins and free cash flow in the near term.