谷歌2025年第四季度业绩点评：保持冷静，继续……投入

U.S. Internet Alphabet Inc Wenhuan Chang+1 917 344 8546wenhuan.chang@bernsteinsg.com Rating Market-Perform Lavnik Balyan+1 917 344 8563lavnik.balyan@bernsteinsg.com Price Target GOOGL 345.00 USD(335.00OLD) Deeksha Pandey+1 917 344 8447deeksha.pandey@bernsteinsg.com Google 4Q25: Keep calm, and carry on... spending In an unforgiving tape, Google took a page out of Meta’s January playbook by blowing top linenumbers out and following it up with the chance to take up AI investment levels materially - incase you haven’t heard the AI opportunity is generational. A week ago this print would havebeen bought up, but it’s February, and it seems no revenue beat is enough in an investment The $400B Gorilla.Revenues grew +18% Y/Y [17% FxN] delivering Google’s first $400B+revenue year led by beats where it mattered most. Search accelerated to +17% Y/Y growthwith management confirm AI driving TAM expansion. Cloud also comfortably beat with 48%Y/Y revenue growth and perhaps more impressively driving cloud margins up 6ppts Q/Q to30% - the-low priced cloud is suddenly in price taking mode! There were some misses withYouTube ads only growing +9% Y/Y against tougher comps, while SP&D also came in a touch Welcome to Google’s Investment Cycle Era.If investors’ chief complaint earlier in the AILLM/search wars was that Google wasn’t spending enough to keep up, they suddenly findthemselves reversing course and wondering if Google is now spending too much with a 2026CapEx guide of $175-185B nearly 2xing investment levels Y/Y over year. And if there wasany lingering doubt that management was being conservative, it certainly sounds like theirbiggest worry these days is how quickly they can spin up more capacity. With EPS/FCF firmly Investment Implications In Google do you trust?Maintain Market-Perform, PT $345 (+10). DETAILS PORTFOLIO MANAGER'S SUMMARY Alphabet reported its 4Q25 results today after the market close. There’s a theme we’re noticing, perhaps you’ve noticed it too. Revenue acceleration continues to defy gravity for our large-capglobal leaders, and whether it’s early proof points on AI driving real contribution to that top-line growth rate, the desire to buildand own the next big thing, or the self-assurance that the spend is going towards hard assets, everyone is going back to theiraccountants to try to figure out what the maximum they can spend is without breaking the bank or their risk management levels. What makes this chapter unique is there’s clearly a bifurcation in the industry of the scaled AI-haves and have-nots. Both Metaand Google (and let’s go out on a limb and assume Amazon offers up a copy & paste quarter tomorrow) have delivered growthrates in their core businesses that were viewed as impossible just a few quarters ago. But that was before we knew that shovingAI across ad delivery, consumer use cases, and ad creative would drive TAM-expanding and share increasing benefits for ourfavorite incumbents. For example,Google put up a 17% Y/Y search growth rate in 4Q, and should build on that in 1Q26given the Meta read-across feels applicable.It wasn’t that long ago that the Street was questioning whether double-digit Once again, management confirmed thatAI searches via Gemini, AI overviews, AI mode, Google Lens, etc. increased thetotal pie of search queries. AI searches are longer, they prompt more follow-on queries, and even introduce new image andvoice-based searches with 1 in 6 AI mode queries already non-text - feeling old yet? Google shipped 250 products tied to AIsearch this past quarter and expect to continue to ship ~100 updates each quarter. Which would be disruptor can compete with If search growth was one marker that gives Google the right to increase investment levels, the other was Cloud, which webelieve absorbed 50%+ of the incremental CapEx spent by Google in 2025. It seemed the bogey for cloud growth went up withevery investor conversation leading into earnings. But even that wasn’t high enough withCloud delivering nearly 50% Y/Yrevenue growth, run-rating at ~$70B vs. YouTube at ~$60B, and a backlog number of $240B that’s up 55% quarter-on-quarter!Add in commentary that suggests they’re picking off new accounts with more $1B+ deals signed in 2025 thanthe last 3 years combined, alongside remarks that point to TPU sales off GCP ahead, and this business looks rock solid even If you stopped reading here, you’d probably guess that Google’s stock ripped after-hours regardless of the multiple it wastrading on or how crowded the position was. But tech investing isn’t easy these days, not even close. Last week Meta produceda similar blow-out quarter on the top-line, pushed investment levels up to 1/3rd of a trillion dollars in 2026, and werehandsomely rewarded for it with a ~10% stock bump the next day. But that stock has now round-tripped and Google found So when Google’s earnings press release came out and guided to $175-185B in 2026 CapEx, it seems like both us and thealgos had to