Alphabet Q4 Earnings Beat Estimates, Shares Dip on AI Spend

Alphabet Inc., the parent company of Google, reported fourth-quarter earnings that surpassed Wall Street expectations on Wednesday, driven by robust growth in advertising and cloud services, though shares declined in after-hours trading amid plans for significantly higher artificial intelligence investments.

The Mountain View, California-based company posted revenue of $113.8 billion for the quarter ended December, an 18 percent increase from the previous year and above analyst estimates of around $95 billion excluding partner payouts. Net income rose 30 percent to $34.5 billion, with earnings per share climbing 31 percent to $2.82. For the full year 2025, Alphabet achieved record revenue of $403 billion and profit of approximately $132 billion, fueled by expansions in its core advertising business, cloud computing and subscriptions.

Google's search and advertising segments remained the primary revenue engines, with digital ad sales totaling $82.3 billion in the quarter, up 14 percent year over year. Search revenue showed particular strength, as usage reached record levels. YouTube generated more than $60 billion annually from advertising and subscriptions, though quarterly ad...