Alphabet Inc. has solidified its position as Wall Street’s frontrunner in the artificial intelligence race, with its fourth-quarter 2025 earnings report on Wednesday, showcasing broad-based revenue acceleration driven by AI integrations across Search, Cloud, and consumer products.

The Google parent reported quarterly revenue of $113.8 billion, up 18% year-over-year (17% in constant currency), surpassing the $111.43 billion LSEG consensus. Net income rose 30% to $34.5 billion, with earnings per share of $2.82, beating estimates of $2.63. Annual revenue exceeded $400 billion for the first time, reaching $402.8 billion, up 15% from 2024. Operating cash flow hit a record $52.4 billion in Q4, resulting in $24.6 billion of free cash flow.

During the earnings call, CEO Sundar Pichai and executives projected a more assertive outlook on AI’s company-wide impact, a departure from prior quarters’ focus on cloud-specific metrics.

“Overall, we’re seeing our AI investments and infrastructure drive revenue and growth across the board,” Pichai stated.

This confidence stems from Gemini 3’s launch in November 2025, which has propelled user engagement and monetization. The Gemini app, rivaling OpenAI’s ChatGPT, now boasts over 750 million monthly active users (MAU), up from 650 million in Q3, with “significantly higher engagement per user” post-Gemini 3. Enterprise adoption surged, with Gemini securing 8 million paying licenses across 2,800+ companies.

Pichai noted Gemini processes over 10 billion tokens per minute via direct API use, while Search revenue grew 17% to $63.1 billion, aided by 250+ AI Mode/AI Overview launches. Google Cloud emerged as the standout performer, with Q4 revenue jumping 48% to $17.7 billion—exceeding estimates of $16.2 billion—and achieving an operating margin of 30.1% (up from 17.5%).

This marked the quickest growth in over four years, fueled by enterprise demand for AI infrastructure, solutions, and core GCP products, with a $240 billion backlog.  YouTube revenue across ads and subscriptions topped $60 billion for 2025, with over 325 million paid subscriptions across consumer services.

CFO Anat Ashkenazi justified the escalated 2026 capex forecast of $175–$185 billion—nearly double 2025’s $91.4 billion and exceeding Bloomberg’s $119.5 billion estimate—as essential to meet surging AI demand and capitalize on growth opportunities. Q4 capex reached $27.9 billion, ramping for AI infrastructure, DeepMind development, cloud customer needs, and strategic bets.

This figure, while alarming investors initially (shares dropped 6% after-hours before recovering to down 1-2%), is seen by analysts as “purposeful” for sustaining leadership.

Alphabet’s trajectory contrasts sharply with OpenAI-linked peers facing valuation headwinds. Microsoft, with a 27% stake in OpenAI, has fallen over 20% since October 2025, amid concerns over OpenAI’s funding sustainability despite multi-billion-dollar deals. Oracle, with a backlog exceeding $500 billion and heavily tied to OpenAI, has tumbled 49% over the same period.

Analysts like Freedom Capital Markets’ Paul Meeks note a “narrative emerging where the market is favoring Google versus OpenAI,” as investors question OpenAI’s ability to meet commitments while incurring losses.

Synovus Trust’s Dan Morgan added: “The deals that OpenAI has with Microsoft and Oracle are highly tied to their ability to raise future funds.”

LOGO ETF’s Eric Clark noted that, “Right now, Google has the hot hand.”

Alphabet’s stock has outperformed, up 65% in 2025 and 6% year-to-date in 2026, with a market cap of over $4 trillion—trailing only Nvidia at $4.2 trillion. Since October 2025, Alphabet has jumped about 36%, while Microsoft and Oracle have declined 20.59% and 41.10% over their respective performance quarters.

This divergence stems from Alphabet’s demonstrated AI monetization—through cloud deals with Meta and Apple, and internal integrations—versus OpenAI’s funding uncertainties.

Analyst reactions have been largely positive, with several firms raising price targets. Barclays, Pivotal Research, and TD Cowen increased 12-month targets, citing AI momentum and cloud acceleration. Mizuho and Roth/MKM also hiked targets to $400 and $365, respectively, maintaining Outperform and Buy ratings.

Despite the earnings beat, shares dipped 2% premarket Thursday after an initial 6% after-hours drop, as investors weighed the $175–185 billion 2026 capex forecast—nearly double 2025’s $91.4 billion and above Bloomberg’s $119.5 billion estimate—against strong results.

CFO Anat Ashkenazi justified the spend as necessary for AI model development, cloud demand, and bets like Waymo, which incurred a $2.1 billion compensation charge in Q4. This positions Alphabet competitively with peers like Meta ($115-135B) and Microsoft (moderating from $37.5B Q4).

The shift in sentiment from OpenAI partners stems from funding risks: OpenAI’s deals with Microsoft and Oracle hinge on its ability to raise capital while incurring losses, per Synovus Trust’s Dan Morgan. Alphabet’s self-reliant AI strategy—bolstered by DeepMind, Gemini, and proprietary TPUs—contrasts with this dependency, drawing favor from analysts like Freedom Capital’s Paul Meeks.

Stock charts illustrate the divergence: Alphabet’s total return since January 2025 stands at 70.1%, with a CAGR of 70.1%, while Microsoft and Oracle have lagged. Oracle’s YTD drop of 20.65% and quarterly decline of 41.10% contrast with Alphabet’s 8.57% YTD gain.

Balaji Srinivasan former Coinbase CTO, author of The Network State, and a prominent crypto advocate He wrote on X: I have never been more bullish on crypto.

Because the rules-based order is collapsing and the code-based order is rising. So the short term price doesn’t matter. As international law breaks down, we will need not just onchain currencies, but onchain companies. As the post-war order breaks down, we’ll similarly need the post-internet order. States will fail, and the network will take their place.

We need internet capitalism, we need internet democracy, and we need internet privacy. So we need cryptocurrency. This came in response to a post suggesting that smart people might flee crypto amid short-term volatility or exits from projects.

The statement has gained significant traction (thousands of likes, reposts, and views within hours) and is being covered in crypto media outlet like CoinDesk especially as Bitcoin has recently dipped below $70,000, sparking broader market panic among some traders.

Balaji’s view frames the current dip as irrelevant noise compared to a larger macro shift: declining trust in traditional geopolitical/institutional systems (“rules-based order”) and the rise of decentralized, code-enforced alternatives (“code-based order”).

He ties this to the need for blockchain-based economies, privacy tools, and new forms of governance as states potentially weaken. This aligns with his long-standing themes around network states, crypto as a foundation for internet-native systems, and skepticism toward legacy institutions.

It’s a strongly optimistic long-term take amid short-term bearish sentiment in parts of the market. The network state is a concept popularized and largely originated by Balaji Srinivasan, former Coinbase CTO, investor, and author of the 2022 book The Network State: How To Start a New Country.

It’s a vision for the successor to the traditional nation-state in a digital, internet-connected world. In its simplest, one-sentence form (as Balaji often summarizes it): A network state is a highly aligned online community with a capacity for collective action that crowdfunds territory around the world and eventually gains diplomatic recognition from pre-existing states.

A more detailed version from his writings includes additional elements: A social network with moral innovation (a shared purpose, proposition, or “national consciousness”). A recognized founder or leader. An integrated cryptocurrency for economic coordination and sovereignty.

A consensual government limited by a social smart contract. The ability to crowdfund and acquire physical territory not necessarily contiguous—think distributed enclaves or an “archipelago”. It’s essentially a startup society that scales from an online community ? a digitally coordinated group with real economic power ? a physical presence ? something recognized as a sovereign entity.

Based on coercive citizenship you’re born into it or naturalize under monopoly rules. Governed by centralized institutions with monopoly on violence. Often inherited rather than chosen. Network states flip this: Start cloud-first (digital, opt-in, global recruitment like a startup or social network).

Voluntary and exit-oriented (you can leave/fork easily; “exit over voice”). Non-contiguous territory (scattered properties linked digitally, like remote company offices or Bitcoin nodes). Built on code (cryptography, smart contracts, on-chain governance) rather than just laws.

Recruit like startups via memes, ideology, crypto incentives rather than birthright. Prioritize decentralized consent (100% opt-in democracy vs. 51% majority rule). Balaji describes it poetically as: A country you can start from your computer. A DAO that materializes in patches of earth.

A nation built from the internet rather than disrupted by it. An archipelago of digitally-linked enclaves. Balaji outlines a reproducible, peaceful process (the “quickstart” in his book and site):Network Society — Build a highly aligned online community around a shared moral innovation or proposition (e.g., health-focused, crypto-native, environmentalist).

Network Union — Organize for collective action (coordination tools, crypto treasury, on-chain metrics). Network Archipelago — Crowdfund and acquire distributed physical properties worldwide (houses, buildings, land via crypto). Scale population/income/territory ? gain diplomatic recognition (negotiate with existing states, perhaps through economic leverage or treaties).

The idea draws from historical precedents like charter cities, special economic zones, seasteading, crypto projects, and even religious diasporas like the Catholic Church as a pre-digital analog with moral mission, global coordination, and land holdings). Balaji ties network states to the “code-based order” rising as the “rules-based order” (traditional geopolitics/international law) collapses.

Internet-native capitalism, democracy, and privacy. Alternatives to failing states via decentralized networks. It’s not about replacing every nation-state overnight but creating parallel, opt-in systems that outperform legacy ones in trust, efficiency, and resilience—especially as digital tools (blockchain, AI, remote coordination) make geography less relevant.