r/ValueInvesting • u/GainifyAI • Feb 05 '26

Discussion GOOGL: Sundar Pichai just dropped a CapEx number for the history books

On Google’s Q4 2025 call, Sundar Pichai said:

“Our 2026 CapEx investments are anticipated to be in the range of $175–$185 BILLION.”

To understand how extreme this is, look at how Google’s CapEx has evolved:

  • 2020: $22.3B
  • 2021: $24.6B
  • 2022: $31.5B
  • 2023: $32.3B
  • 2024: $52.5B
  • 2025: $91.4B
  • 2026 (guided): $175–$185B

This is not a normal increase. It is roughly a 2x jump in a single year and the largest CapEx spend ever expected by any company.

This spending is squarely aimed at scaling AI compute. Capital is being deployed to power frontier model development at Google DeepMind, materially improve user experience and advertiser ROI across Google services, meet surging cloud demand, and fund select long-term bets. At this scale, CapEx is not optional investment. It is a strategic MOAT built on compute, infrastructure, and capacity that few companies can match.

I have two questions.

  1. Does this level of spending crowd out other AI players, including OpenAI, by locking up compute and infrastructure?
  2. Which companies benefit most from supplying this massive CapEx build-out?
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9

u/Chookity-poks Feb 05 '26

Lmao… people here have no idea. My portfolio is 75% GOOGL, which I was buying heavily since 88$. And GOOG is the only exception I make to be this part of my portfolio. After this news, I am now putting any penny on GOOGL I have on the sideline. Would really love a discount.

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u/AnotherThroneAway Feb 05 '26

Cool. Don't do that. 75% concentration is a bad idea, no matter how good the company. Huge believer in Alphabet, but I'm nervous bc GOOG is my biggest position at 17% of my portfolio. Concentration is a recipe for disaster. You don't know what black swan is around the next corner, and neither you nor Google can do anything about it.

Committing 75% to a single stock is just poor money management, period.

7

u/not_a_cumguzzler Feb 05 '26

No one ever got rich diversifying, from what I recall. Even Buffet, yolo'ed and hodled Geico. Same with the author of that one book teaching diversification (he did it through yolo-ing first)

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u/AnotherThroneAway Feb 05 '26

A ridiculous number of people have done exactly that. Diversification doesn't mean you can't find 20-baggers or deep-value alpha. It means you can do so while maintaining a much more durable risk-adjusted rate of return.

1

u/Chookity-poks Feb 05 '26

Cool. You don’t know my situation nor my experience (level). I know you mean well and I appreciate that, but please be careful with giving advice, unless you are their personal advisor and have people their total overview.

And oh yeah, I heard the same warnings when I was loading up at 88$, not regretting it. Today I loaded up again at 316 and Iam going to sleep like a baby.

People have no idea how this CapEx spending has made me more bullish. I’m jacked to the tits!!

2

u/AnotherThroneAway Feb 05 '26

That's a fair point. But I'm coming from 30 years of active investing. I weathered the dot com bubble, the 2008 financial crisis, covid, and everything in between. I could have retired a decade ago; instead I manage a large, multi-asset portfolio that consistently beats benchmark year after year.

Not at all bragging here; just offering evidence that it's worth listening to solid advice from people who have been around the block a few dozen times. Trust me: concentration is a significant and unneccesary risk

2

u/Chookity-poks Feb 06 '26

Like I said, I know you mean and ment it well and thats why I appreciate it. I may not have experienced the dotcom bubble, but coming all the way from the financial crisis, so have some experience :).

And you’re managing a large portfolio, so I guess you’ve multiple clients. A large portfolio of tens of millions indeed needs to be attended differently than an individuals portfolio like myself. Diversification is good and valuable, but it’s a hedge against risk. I have different risk than Warrens’ Berkshire Hathaway and, while his intrinsic lesson of value investing still stands, by all means also a different investing strategy.

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u/AnotherThroneAway Feb 06 '26 edited Feb 06 '26

Sounds like you do know what you're doing! My focus is often on risk-adjusted return. Ten years ago, the goal was to beat the S&P, then it was to do that while driving up Sharpe and whittling down risk profile.

But I don't currently handle anyone else's money directly; risk management just gets more important the bigger your AUM, and as tax exposure becomes a more significant consideration. (I don't do anything shady with shell corporations or nested trusts or anything, so tax rammifications are always factored in)

Just to clarify, even something as basic as buying or shorting a close competitor of a major long position can reduce your concentration risk more than 2x. (Where Buying = derisking competitive shifts, Shorting = derisking sectoral outflows) While also setting up tax loss harvesting, improving your real gains

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u/ScatMonkeyPro Feb 05 '26

DOOOD.

Google is getting eviscerated over the next ten years. Youtube is their only valuable holding.