Recently, I’ve been reviewing Google's financial report data and found a few interesting points.

First, let's talk about the advertising business, which has always been Google's cash cow. Search advertising revenue is expected to reach $61.9 billion, and YouTube advertising $12 billion. Together, these two segments have grown about 15% year-over-year. You might ask, what is YoY? It’s short for year-over-year, simply the growth rate compared to the same period last year. This growth rate is quite good in the current digital advertising market, especially as AI tools like Gemini 3.0 begin integrating into search and YouTube, significantly improving targeting efficiency, which is very attractive to advertisers.

In the cloud business, growth is even more impressive, with a YoY increase of 35%, and revenue expected to reach $16.2 billion. This growth rate is quite remarkable in the cloud computing sector and reflects Google's competitiveness in AI and data center infrastructure. The high growth in this segment provides strong support for the company's long-term valuation.

But the most attention-grabbing aspect is capital expenditure. Google’s capital spending in Q4 is expected to be $29.2 billion, a 105% increase YoY, which is a substantial figure. Moreover, the capital expenditure forecast for 2026 is $139 billion, far above the market’s previous expectation of $119 billion. This indicates that Google is significantly ramping up investments in AI infrastructure, but the key question is whether these investments can effectively translate into revenue growth.

From a cost control perspective, operating expenses are up 13% YoY, and operating profit margin remains at 39.1%, showing that the company can manage costs while maintaining solid profitability. This is positive for shareholder returns.

Regarding free cash flow, it’s worth noting that in Q4, it declined 53% YoY, mainly due to a sharp increase in capital expenditures. However, this is understandable since the company is making large-scale investments in AI infrastructure. The key is whether these investments will generate the expected returns in the future.

From a trading perspective, if this earnings report surpasses expectations in revenue and profit, and if the guidance for capital expenditure emphasizes the return prospects of AI investments, the stock price could see short-term gains. Conversely, if cloud growth underperforms or costs exceed expectations, there’s a risk of a pullback. It’s especially important to watch whether the key figures—total revenue of $95.2 billion, cloud revenue of $16.2 billion, and capital expenditure of $29.2 billion—meet expectations.