Alphabet’s Heavy Investment Strategy Weighs on Investor Sentiment

Alphabet Inc. has reported a set of robust operational results, yet its share price performance has recently lagged. The tension stems not from its core business performance but from two persistent concerns unsettling the market: a massive planned capital expenditure program and renewed regulatory scrutiny from European authorities.

Regulatory Scrutiny Intensifies in Europe

Adding to the company’s challenges is fresh regulatory pressure from the European Union. According to reports from Bloomberg and Reuters, the European Commission initiated a new antitrust investigation on February 12 focusing on Google’s practices in search advertising auctions. A commission document cited in the reports suggests a suspicion that the auction “clearing price” is being artificially inflated, potentially harming advertising customers. This inquiry adds to Alphabet’s existing regulatory history in the EU, where it has faced years of oversight and multibillion-euro fines in the past.

Quarterly and Annual Performance Exceeds Forecasts

Financially, the company delivered strong figures. For the fourth quarter of 2025, Alphabet surpassed consensus estimates for both profit and revenue. Earnings per share reached $2.82 against an expected $2.57, while revenue came in at $113.83 billion. A standout performer was Google Cloud, which saw its quarterly revenue surge by 48% to $17.66 billion. Furthermore, the cloud division’s backlog, as stated in corporate filings, grew by 55% quarter-over-quarter to $240 billion, signaling sustained high demand from enterprise clients.

For the full year, Alphabet posted revenue of $402.8 billion and earnings per share of $10.81, representing a 17% annual increase in revenue.

A Multi-Billion Dollar Bond for AI Ambitions

The scale of Alphabet’s future spending plans came into sharper focus with news of a substantial bond issuance. As reported by Reuters and Bloomberg, the company placed bonds worth approximately $31.5 billion across multiple currencies. This included a rare 100-year Sterling bond, a “century bond” tranche of £1 billion that reportedly attracted significant investor interest, with orders totaling around £9.5 billion.

Should investors sell immediately? Or is it worth buying Alphabet?

The capital raise is directly linked to an aggressive investment roadmap. Alphabet intends to ramp up its planned investments for 2026 to a range of $175 to $185 billion. These funds are primarily earmarked for expanding artificial intelligence computing capacity and cloud infrastructure. This capital expenditure (CapEx) outlook is cited as a key factor pressuring market sentiment, as investors grow concerned about the impact on Alphabet’s free cash flow. These concerns are amplified by the fact that numerous large technology firms are simultaneously making heavy investments in AI infrastructure.

This investor apprehension is reflected in the stock’s recent performance, which shows a decline of 22.17% over the past 30 days.

Core AI and Mobility Projects Show Progress

Amid the financial and regulatory headlines, Alphabet continues to advance its key technological initiatives. Its Gemini AI platform now boasts 750 million monthly active users, according to MarketBeat, with its API processing over 10 billion tokens per minute. The company also reportedly reduced Gemini’s serving costs by 78% in 2025 through model optimizations. Concurrently, its autonomous driving unit, Waymo, is deploying the sixth generation of its self-driving system and planning expansion into new cities, including proposed launches in Tokyo and London.

The overall picture presents a clear dichotomy: Alphabet demonstrates powerful operational momentum, but its equity is reacting sensitively to two near-term uncertainties—the capital intensity of its AI investments ($175–$185 billion CapEx for 2026) and the new EU antitrust probe into its advertising auctions.