Alphabet Inc.

This report does not constitute a rating action. Overview Key strengths Key risks Strong position in the online search and video advertising market, supported by unique data. Large investments required to fund AI initiatives. Strong technological talent that drives innovative product development. Evolving AI landscape could increase competitive landscape in search and digital advertising. Good operating record with strong revenue growth and high profit margins. Regulatory scrutiny across regions in antitrust, liability for third-party content, and privacy. Financial flexibility with a substantial net cash balance. As the competition to invest in AI intensifies, we forecast Alphabet, like many of its peers, will increase capex in 2025 to about $91 billion-$93 billion and close to $120 billion in 2026. This represents

...Growing capital expenditure (capex) spend to fund AI growth. As the competition to invest in AI intensifies, we forecast Alphabet, like many of its peers, will increase capex in 2025 to about $91 billion-$93 billion and close to $120 billion in 2026. This represents a 77% increase in 2025 and a further 30% increase in 2026, with a significant portion of the increase allocated to fund AI infrastructure projects including for data centers, servers and equipment. We forecast the...

Full Report