TLDR
- ARK Invest purchased 31,505 Alphabet shares valued at $10.4 million after the stock declined 2.5% to $165.12
- Alphabet’s Q4 2025 revenue grew 18% with Cloud revenue jumping 48%, beating Wall Street forecasts
- Piper Sandler, JPMorgan, and BMO Capital raised price targets to $395-$400 following strong earnings
- Alphabet’s 2026 capex guidance of $180 billion sparked concerns, up from $110 billion estimates
- ARK reduced positions in Coinbase after a 13% rally and trimmed Roku holdings
Cathie Wood’s ARK Invest made a contrarian move on Alphabet Inc. Friday. The firm purchased shares while other investors sold on spending concerns.
ARK acquired 31,505 shares worth about $10.4 million on February 6. The buy came as GOOGL stock fell 2.5% to $165.12.
The decline followed Alphabet’s announcement of higher capital spending for 2026. Wood appears to view this weakness as a buying opportunity.
The purchase signals confidence in Alphabet’s artificial intelligence and cloud computing strategy. ARK’s move contrasts with the market’s negative reaction to increased expenses.
At the same time, ARK trimmed its Coinbase position after the crypto stock rallied 13%. The fund also reduced its Roku stake.
Wall Street Raises Targets After Earnings Beat
Alphabet delivered fourth-quarter 2025 results that exceeded expectations across the board. Revenue growth accelerated to 18%, topping the 15.5% consensus estimate.
Google Cloud was the standout performer with 48% year-over-year growth. Cloud backlog surged to $240 billion from $155 billion in the prior quarter.
The Search segment also showed acceleration during the period. EBITDA came in roughly 2% above analyst forecasts.
Piper Sandler responded by raising its price target from $365 to $395. The firm maintained its Overweight rating citing strong operational execution.
JPMorgan lifted its target to $395, highlighting momentum in core business segments. BMO Capital increased its target to $400.
DA Davidson raised its price target to $310, emphasizing Cloud division strength. Cantor Fitzgerald kept its $370 target with an Overweight rating.
Stifel adjusted its target to $395, pointing to Cloud growth potential. The consensus view remains positive despite near-term spending concerns.
Spending Guidance Pressures Shares
Alphabet’s management projected capital expenditures of approximately $180 billion for 2026. This represents a substantial increase from the previous $110 billion estimate.
The higher spending forecast will put pressure on free cash flow generation. Investors worried about returns on the increased AI infrastructure investment.
YouTube growth slowed during the quarter, though overall results remained strong. The deceleration added to investor caution about the stock.
Alphabet closed Friday at $165.12 per share. The stock has faced headwinds as the market digests the new spending plans.
Wood’s purchase suggests ARK believes the market is overreacting to capex increases. The fund appears to be betting on long-term AI leadership over short-term cash flow concerns.
Analysts generally view the higher spending as necessary for competitive positioning. Most firms expect the investments to drive future revenue growth.
The stock trades well below analyst price targets following the recent decline. ARK’s buy reinforces the view that current levels present value.
