Google’s parent company, Alphabet, saw its shares decline in premarket trading despite reporting earnings that exceeded expectations. The drop reflects investor concerns over the company’s aggressive capital expenditure plans, even as strong performance in key areas like cloud computing and AI continues to drive growth. Barclays analysts highlighted that rising costs associated with infrastructure, DeepMind, and Waymo are negatively impacting Alphabet’s overall profitability, a trend they expect to persist through 2026. However, they emphasized that the company’s cloud business is growing at an extraordinary pace across multiple metrics—revenue, backlog, API tokens processed, and enterprise adoption of Gemini. These indicators, combined with DeepMind’s advancements in model development, are beginning to justify Alphabet’s planned 100% increase in capital spending for 2026. “The AI story is getting better while Search is accelerating— that’s the most important take for GOOG,” the analysts concluded. Meanwhile, Deutsche Bank analysts described Alphabet’s massive capex strategy as “stunning,” calling it a bold move in a tech landscape marked by uncertainty. “With tech in a current state of flux, it's not clear whether that's a good or a bad thing,” they noted, underscoring the mixed sentiment among investors about the long-term implications of such heavy investment. Despite the earnings beat, the market reaction suggests that while Alphabet’s AI and cloud momentum is undeniable, the financial toll of scaling infrastructure and R&D may be weighing on investor confidence in the near term.