By Angela Palumbo

J.P. Morgan says Alphabet investors shouldn't be spooked by the company's plans for continued vast capital spending.

Analyst Doug Anmuth said in a research note he thinks Alphabet is in a solid position after reporting strong fourth-quarter financial results last week. He is optimistic about the company's plans to invest heavily in artificial intelligence.

"We believe GOOGL is best positioned to support the large jump in capex as GOOGL currently has $80B in net cash, ahead of AMZN's $57B & META's & $23B, and should generate the most cash in 2026," Anmuth wrote on Monday.

Alphabet expects 2026 capital expenditures to be between $175 billion and $185 billion. That would be more or less double the 2025 total of $91.4 billion as the company builds more AI infrastructure to meet growing demand. Amazon.com and Meta Platforms also committed to spending hundreds of billions more on AI in their latest earnings releases.

Anmuth rates Alphabet as Overweight and wrote that the stock is still a "best idea." He has a $395 price target for Alphabet, which implies a 22% increase from the stock's Friday closing price of $322.86.

Alphabet stock has dropped about 2% since the company, Google's parent, reported its fourth-quarter earnings on Feb. 4. Investors seem stuck on the company's spending forecast.

Some are certain that companies need to invest big on AI now to reap the benefits as the technology evolves. Others are concerned that tech stocks are in a bubble and that companies' investments in AI haven't yielded large returns.

Anmuth is confident that Alphabet, Google's parent, can ease concerns about how it will cash in.

"We believe GOOGL has a broad set of monetization levers, including Search, Cloud, and a growing AI driven ad opportunity, with the massive growth in backlog providing a tangible bridge to future revenue and margin expansion," Anmuth said.

Alphabet stock was up 0.7% to $325.09 on Monday.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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February 09, 2026 15:32 ET (20:32 GMT)

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