Episode summary
Alphabet Plans Record Spending in Race to Win AI Customers | Bloomberg Intelligence
Bloomberg Intelligence
· · 22 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: Mandeep Singh, Kunjan Sobhani, Geetha Ranganathan, Deborah Aitken
Summary
Alphabet’s results and 2026 capex guide dominated the conversation, with the host and Mandeep Singh arguing that the market is focused less on this year’s spending spike than on what the investment buys. Singh said Alphabet’s $185 billion full-year capex and a projected $285 billion in 2026 reflect a buildout that should keep cloud and search growth strong, with AI infrastructure helping drive a roughly 200 basis-point uplift in topline growth and a possible 50% plus cloud growth run-rate over the next four quarters. He also said the market had already anticipated the upside, despite fears that ChatGPT would hurt Google’s core search business.
Qualcomm’s weaker forecast was framed as a mix of handset seasonality and memory supply constraints, not demand destruction. Kunjan Sobhani said Android launches were pulled forward, making the next quarter a trough, while higher HBM memory costs are pressuring Chinese OEMs to slow orders. He also said Qualcomm’s diversification into auto and IoT is progressing, but the business remains heavily handset-dependent.
The panel also said Peloton’s turnaround is still struggling to translate product refreshes and price increases into revenue growth, while Estée Lauder’s outlook was seen as good enough to show progress but not enough to reassure investors that the beauty recovery is moving fast enough.
Key takeaways
- Mandeep Singh said Alphabet’s 2026 capex guide suggests a peak in hyperscaler spending growth, but it also supports stronger cloud and search revenue.
- Singh argued Alphabet is already seeing an ROI from AI investment, with topline growth up about 200 basis points and search clicks still rising.
- Kunjan Sobhani said Qualcomm’s weaker outlook stems from pulled-forward handset demand and memory supply constraints hitting Chinese OEMs, not a broad demand collapse.
- Sobhani said Qualcomm is diversifying into auto and IoT, but handsets still dominate enough to keep the stock under pressure.
- Geetha Ranganathan said Peloton’s cost cuts are helping profits, but weak revenue and an underwhelming upgrade cycle are still hurting investor confidence.
- Deborah Aitken said Estée Lauder’s beat was not transformational because travel retail, China exposure, and a slower luxury beauty recovery remain headwinds.
Notable quotes
“$185 billion a fullear capex uh much much higher than what was anticipated”
“for 2026, yeah, they've guided $285 billion. I mean, chances are the growth rates are going to decelerate from this point on”
“So yes this year is going to look phenomenal but as you look past this year you will see a deceleration”
“It's uh beyond fathomable, you know, in in in Alphabet's case and partly it has to do with the success of Gemini”
“No, it's uh nothing to do with demand. There's two factors here”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.
Listen on demand wherever you get your podcasts or watch us live on YouTube. Let's go back to big tech because we can't stay away from them for too long. Uh the we have one more Mag7 name reporting today.
Uh Amazon will be reporting. Alphabet reported yesterday and I want to go back to that capex number which just blew people's minds. $185 billion a fullear capex uh much much higher than what was anticipated.
Mandep Singh is our go-to guy for all things tech. He's our global tech research head here at Bloomberg Intelligence and joins us now. One trader called it Alphabet's mic drop capex highlights the have versus have nots and AI capabilities commitments and balance sheet.
Once upon a time spending on you know your future growth was a good thing but now any kind of capex commitment bigger than what people anticipated is seen as negative.
Well I think in this case the market is thinking what comes next. So for 2026, yeah, they've guided $285 billion. I mean, chances are the growth rates are going to decelerate from this point on.
So 2026 will be the peak capex for a lot of these companies, especially in terms of growth rates. You're not going to see, you know, 50 60% growth in capex going forward from these numbers. So that's a given and that's why you know the market will be anticipatory in that sense in terms of how that capex growth is going to pan out from this point on because you know for some of the chip makers their growth is directly correlated to capex growth of the hyperscalers.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai spending
- alphabet earnings
- semiconductor demand outlook
- consumer tech earnings
- luxury cosmetics turnaround
Companies and tickers mentioned
- GOOGL
- GOOG
- QCOM
- PTON
- EL
- Alphabet Inc.
- Qualcomm
- Peloton Interactive Inc.
- Estee Lauder Cos.
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Bloomberg Intelligence
-
Anthropic’s IPO Is Said to Be About Six Times Oversubscribed | Bloomberg Intelligence -
Instant Reaction: Nvidia CEO Jensen Huang Ousted by Nvidia Board | Bloomberg Intelligence -
Nvidia’s Huang Ousted by Board in Move That Roils AI Economy | Bloomberg Intelligence -
CoreWeave Shares Soar After AI Computing Firm Eases Debt Fears | Bloomberg Intelligence -
Anthropic Targets $1.4 Trillion Valuation in Blockbuster IPO | Bloomberg Intelligence -
Nvidia Probe Into CEO Affair Raises Thorny Questions for AI | Bloomberg Intelligence
Bloomberg Intelligence, this episode and its artwork belong to Bloomberg. Octagon is not affiliated with the show; this page is an independent summary.
