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Alphabet Beats Expectations as AI Spending Risks Take Center Stage

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Netflix And Intel Earnings Preview

Editor’s note: Alphabet has reported a strong fourth quarter, beating market expectations on both revenue and earnings, driven by continued resilience in advertising and a sharp acceleration in Google Cloud profitability. While headline growth remains solid, the results have refocused investor attention on the scale of Alphabet’s capital expenditure, particularly its aggressive push into artificial intelligence. With AI adoption expanding rapidly across platforms like Gemini, the key question is no longer demand, but whether and when that usage can be translated into sustainable revenue and returns for shareholders.

Key points

  • Alphabet’s Q4 revenue rose 18% year on year, with earnings exceeding expectations.
  • Google Cloud revenue jumped 48% to USD 17.7 billion, with operating income more than doubling.
  • Advertising revenue remained resilient, growing 14% year on year.
  • Capital expenditure reached USD 91.5 billion in the quarter, with 2026 guidance set at USD 175–185 billion.
  • Gemini has surpassed 750 million monthly users, highlighting rapid AI adoption.

Why this matters

Alphabet’s results underline a broader shift across Big Tech, where profitability in core businesses is increasingly funding massive AI investment cycles. For investors, the tension lies between long-term strategic positioning and near-term pressure on free cash flow and margins. For the wider digital economy, Alphabet’s spending signals how central AI infrastructure has become to future competitiveness, influencing cloud markets, enterprise adoption, and the pace at which AI moves from experimentation to monetised products.

What to watch next

  • How Alphabet manages capital expenditure discipline relative to revenue growth.
  • Signals around AI monetisation beyond user growth metrics.
  • Cloud margin trends as investment intensity remains elevated.

Disclosure: The content below is a press release provided by the company/PR representative. It is published for informational purposes.

Abu Dhabi, United Arab Emirates – February 05, 2026: Alphabet (NASDAQ: GOOG) reported a solid fourth quarter, with revenue rising 18% year on year and earnings surpassing market expectations, underpinned by resilient performance across its core businesses.

Google’s advertising segment continued to show strength, with advertising revenue up 14% year on year. Google Cloud was the standout performer, posting revenue growth of 48% to USD 17.7 billion and delivering operating income of USD 5.3 billion—more than double the figure recorded in the same period last year.

Netflix And Intel Earnings Preview
Zavier Wong, Market Analyst at eToro

Commenting on the results, Zavier Wong, Market Analyst at eToro, said that while Alphabet’s headline numbers were encouraging, investor attention has shifted toward the scale and execution risk of the company’s capital expenditure plans.

During the quarter alone, Alphabet spent USD 91.5 billion and has guided for capital expenditures of USD 175–185 billion in 2026—well above market expectations. From a shareholder perspective, this level of spending materially reduces free cash flow in the near term, with returns on AI investments yet to be proven at scale.
Alphabet is effectively asking investors to be patient and trust that artificial intelligence will evolve into a significant revenue driver.

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While the company has little choice but to invest heavily to remain competitive with rivals such as Microsoft, Amazon, and OpenAI, the timeline for meaningful AI monetisation remains uncertain.
AI adoption is clearly accelerating, with Alphabet’s Gemini platform surpassing 750 million monthly users.

However, the gap between usage and monetisation remains wide, and prolonged delays in converting AI engagement into revenue could weigh on margins and earnings.

Wong added that although AI spending has so far been viewed as necessary and largely justified, Alphabet’s latest guidance represents a material escalation. “This marks one of the most significant risks we’ve seen so far in the current AI investment cycle,” he noted.

Media Contact:
PR@etoro.com

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Crypto World

Ansem Says Ethereum Is in a Worse Spot Than 2023 as Thesis Weakens

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Ethereum Price Prediction

Crypto analyst Ansem argues that Ethereum (ETH) is in a “worse spot” in 2026 than it was in 2023, pointing to a thesis he says has been eroding for years.

His bearish take drew rebuttals from some members of the community. Meanwhile, on-chain activity and technical indicators elsewhere on the network flash bullish signals.

Ansem Lists Cracks in the ETH Thesis

Ansem argues that Solana (SOL) has dominated retail activity this cycle. Hyperliquid has taken the lead in perpetual futures trading, while rollups have failed to gain traction.

He also noted that Vitalik Buterin “publicly abandoned” the general-use rollup thesis. The ongoing Aave (AAVE) situation around the KelpDAO rsETH exploit, Ansem said, is a mark on  Ethereum’s core value proposition of “safety + security of defi & insto interest.

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“ETH thesis has been weakening consistently for years,” the analyst wrote. ETH in 2026 is in a worse spot than it was in 2023, amplified by AI doing extremely well & tech stocks being much more favorable investments with real revenues / emerging narratives / increasing momentum, ETH is a $300B asset with a ton of overhang from Tom Lee topblasting + complacent ETH holders sitting idle in defi protocols.”

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Technically, the analyst noted that ETH remains in a sustained downtrend after failing to break multi-year resistance. He projected that the second-largest cryptocurrency could slip to 2025 lows near $1,300 and to the bear-market lows from 2022.

“Tight invalidation 2377 assuming problems worsen if you want to play it loose assuming other risk assets continues doing well & drags it up probably somewhere around 2700/2800 invalidation fundamentals wise would want to see breakout activity from some new vertical,” the post read.

Ethereum Price Prediction
Ethereum Price Prediction. Source: X/Ansem

Community Members Push Back

The take triggered notable pushback. Ryan Berckmans accused Ansem of not understanding fundamentals. Leo Lanza went further, sharply dismissing the analyst’s bearish case on X.

Another user pointed to a 56% drop in the SOL/ETH pair this cycle.

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“Soleth is down 56% after being up 12x+ *this cycle* because one guy decided to buy 5% of the eth supply after it had underperformed all cycle. idk why you guys act like i dont also bearpost solana i havent posted anything bullish about sol in over a year,” Ansem replied.

Not everyone shares the bearish view on Ethereum. BeInCrypto recently highlighted that network activity remains strong, while technical indicators like the Rainbow Chart and MACD are also flashing bullish signals.

With macro and geopolitical uncertainty still in play, the question is whether ETH slides further this year or stages a renewed rally.

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The post Ansem Says Ethereum Is in a Worse Spot Than 2023 as Thesis Weakens appeared first on BeInCrypto.

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Aave’s TVL Falls $8B After $293M Kelp DAO Hack

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Aave’s TVL Falls $8B After $293M Kelp DAO Hack

Total value locked on decentralized lending protocol Aave dropped by nearly $8 billion over the weekend after hackers behind the $293 million Kelp DAO exploit borrowed funds on Aave, leaving roughly $195 million in “bad debt” on the protocol and triggering withdrawals.

Data from DeFiLlama shows that Aave’s TVL fell from about $26.4 billion to $18.6 billion by Sunday, losing the top spot as the largest DeFi protocol. 

Aave v3’s lending pools for USDt (USDT) and USDC (USDC) are now at 100% utilization, meaning that more than $5.1 billion worth of stablecoins cannot be withdrawn until new liquidity arrives or borrows are repaid. 

$2,540 is available to be withdrawn from the $2.87 billion USDT pool on Aave v3 at the time of writing. Source: Aave

Aave’s TVL fall shows how rapidly risk from a single security incident can spread throughout the broader, interconnected DeFi lending market, potentially leading to a severe liquidity crisis.

The incident began on Saturday when hackers stole 116,500 Kelp DAO Restaked ETH (rsETH) tokens worth about $293 million from Kelp DAO’s LayerZero-powered bridge and used them as collateral on Aave v3 to borrow wrapped Ether (wETH).

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Crypto analytics platform Lookonchain said the move created about $195 million in “bad debt” on Aave, which contributed to the Aave (AAVE) token tanking nearly 20% from $112 on Saturday at 6:00 pm UTC to $89.5 about 25 hours later. 

Lookonchain noted that some of the largest crypto whales to withdraw funds from Aave were the MEXC crypto exchange and Abraxas Capital at $431 million and $392 million, respectively.

Source: Grvt

Several crypto networks and protocols tied to rsETH or the LayerZero bridge have paused use of the bridge until the problem is resolved, including DeFi platform Curve Finance, stablecoin issuer Ethena and BitGo’s Wrapped Bitcoin (WBTC).

Aave has frozen several rsETH, wETH markets

Shortly after the Kelp DAO exploit, Aave said it froze the rsETH markets on both Aave v3 and v4 to prevent any suspicious borrowing and later stated that rsETH on Ethereum mainnet remains fully backed by underlying assets.

WETH reserves also remain frozen on Ethereum, Arbitrum, Base, Mantle and Linea, Aave said.

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This incident marks the first significant stress test of Aave’s “Umbrella” security model, which was introduced in June 2025 to provide automated protection against protocol bad debt while enabling users to earn rewards.

Related: Aave DAO backs V4 mainnet plan in near-unanimous vote

Earlier this month, the Bank of Canada found that Aave avoided bad debt in its v3 market by using overcollateralization, automated liquidations and other strategies that shifted risk to borrowers.

In comments to Cointelegraph, Aave defended its liquidation-based model, framing it as a core safety mechanism that protects lenders while limiting downside for borrowers.

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It comes as Aave parted ways with its longest-standing DeFi risk service provider, Chaos Labs, on April 6, following disagreements over the direction of Aave v4 and budget constraints.

Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?