Alphabet expects further growth in CapEx in 2026, doesn’t list tariff as one of the headwinds in H2 2025
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Alphabet expects CapEx to increase further in 2026 due to customer demand and opportunities they are seeing across the company.
“Looking out to 2026, we expect a further increase in CapEx due to the demand we’re seeing from customers as well as growth opportunities across the company,” CFO Anat Ashkenazi announced in the earnings call.
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Almost the entire CapEx is going to servers and data centres.
“The vast majority of our CapEx was invested in technical infrastructure, with approximately two-thirds of investments in servers and one-third in data centers and networking equipment,” Anat said.
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Management didn’t mention the impact of the tariffs, only saying second half of 2025 will be impacted by strong comps.
“Advertising revenues in the second half of 2025 will be affected by the following: the continued lapping of the strength we experienced in financial service verticals throughout 2024, and year-over-year comparisons will be negatively impacted by the strong spend on US elections in the second half of 2024, particularly on YouTube,” Anat said.
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Alphabet’s AI ad generation tools continue to see good traction.
“Over two million advertisers now use Google’s AI-powered asset generation tools… a 50% increase on this time last year, " CBO Philipp Schindler said.