Wall Street braces for turbulence as Alphabet unleashes massive AI spending plans, fueling a tech earnings frenzy ahead of Amazon’s report.
Futures signal volatility, with Dow down 0.1%, S&P 500 up 0.1%, and Nasdaq 100 gaining 0.3% as of 02:44 ET on February 5, 2026.
Alphabet Doubles Down on AI Dominance
Alphabet stunned investors by projecting $175-185 billion in 2026 capital expenditures, potentially doubling 2025’s $91.4 billion outlay.
CEO Sundar Pichai declared,
Overall, we’re seeing our AI investments and infrastructure drive revenue and growth across the board.
Spotlighting Gemini’s 750 million monthly users, nearing ChatGPT’s 800 million. Alphabet intends to spend $175–185 billion on capital projects in 2026, which is almost twice as much as $91.4 billion in 2025.
Revenue for the fourth quarter of 2025 exceeded projections at $113.8 billion, with Google Cloud coming in at $17.7 billion, yet cloud revenue surges eased fears, narrowing the AI leadership gap with OpenAI.
Amazon Faces AI Spotlight
As analysts pointed out in their pre-earnings reports, Amazon has lagged behind the majority of its mega-cap tech peers for much of the past year. Despite the poor performance, many investment banks are confident that the company will reveal new growth from Amazon Web Services (AWS) and provide important AI updates.
Wall Street anticipates Amazon’s quarterly earnings per share of $1.96 and revenue of $211.2 billion to $211.56 billion. Analysts expect Amazon’s earnings before interest and taxes to be $24.6 billion. Similarly, ECB holds at 2.15%, 2.4%, and 2%. BOE holds rates at 3.75% amid Eurozone CPI dipping to 1.7% below target hinting at easing risks
Outlook: High Stakes AI Bet
The recent surge in capital spending by Alphabet is putting strain on the current anticipations regarding investment in AI yielding some tangible outcome, especially in an environment where the software industry is facing crisis and by its widest margin in recent history.
In case such capital allocations turn out to be effective, it can make technology conglomerates to valuations never seen before; while in case they backfire, the likelihood of a speculative bubble burst surge will rise thus creating a deep schism between AI gainers and its losers in the next year.