Google just dropped a bombshell that's rattling Silicon Valley. The search giant announced it's planning to spend up to $185 billion on capital expenditures in 2026 - more than doubling last year's spending - sending its stock tumbling 3% in after-hours trading despite beating earnings expectations. The massive infrastructure bet comes as the AI hardware market shows cracks, with AMD plummeting 17.3% on disappointing guidance and dragging down the entire sector.
Google parent Alphabet delivered a classic good news-bad news scenario that left Wall Street queasy. The company's fourth-quarter results beat analyst expectations across the board, with its cloud division posting a stunning 48% revenue jump from the prior year, according to CNBC's reporting. But the celebration was short-lived.
CFO guidance revealed that Google expects to pour between $175 billion and $185 billion into capital expenditures this year - a staggering sum that would more than double the company's 2025 spending. The announcement sent shares down as much as 3% in extended trading, as investors grappled with the reality that the AI arms race is about to get exponentially more expensive.
The timing couldn't be worse for AI hardware makers. AMD shares got absolutely hammered Tuesday, dropping 17.3% during regular trading after the chipmaker issued a disappointing first-quarter forecast that suggested AI chip demand might be cooling. The carnage spread across the sector, with Broadcom and Oracle also sliding as traders reassessed their AI exposure.
The Nasdaq Composite fell 1.51% while the S&P 500 retreated 0.51%, marking the index's fifth down session in six days. Only the Dow Jones Industrial Average managed to stay positive, up 0.53% thanks to strength in healthcare and industrial names like Amgen and Honeywell.
