Alphabet's Strategic Moves: Chips, Cash, and Coming Earnings

Alphabet expands Intel chip partnership for AI, invests up to $185B in infrastructure, and grows Waymo's fleet. Stock recovers after initial AI spend announcement triggered a dip.

As Alphabet prepares to release its first-quarter 2026 results, the tech giant is making significant strides across its business, from deepening hardware partnerships to expanding its autonomous vehicle fleet. The company's multifaceted strategy highlights its push to secure a dominant position in the AI era while navigating regulatory landscapes and managing substantial investments.

A key development this week was the expansion of Alphabet's partnership with Intel, signaling a strategic diversification in its chip procurement. The agreement commits Google to deploying multiple generations of Intel processors, including the latest Xeon-6 CPUs, within its AI data centers. These chips will be used for both training and running AI models, a market segment long dominated by Nvidia. Beyond standard processors, the two companies are also broadening their joint development of custom Infrastructure Processing Units (IPUs). These programmable accelerators, a collaboration dating back to 2022, handle tasks like network routing and data encryption, freeing up the main CPU for more complex workloads and improving data center efficiency. The move comes at a time of global CPU shortages and demonstrates Google's intent not to rely solely on its own silicon or its existing alliance with Broadcom.

Financially, Alphabet is placing big bets to fuel its ambitions. The company is investing directly from its balance sheet into promising AI startups, mirroring strategies from peers like Microsoft and Nvidia. Its stake in AI firm Anthropic now exceeds $3 billion, representing an estimated 14% ownership. Furthermore, an early 2015 investment in SpaceX holds the potential to yield a staggering $100 billion or more for the conglomerate. This aggressive investment posture, however, carries a cost. After hitting an all-time high of $349 in early February, Alphabet's stock fell roughly 20% by March, a drop largely triggered by its announcement to invest between $175 and $185 billion in AI infrastructure by 2026. The share price has since recovered and currently trades about 17% above its 200-day moving average.

On the operational front, Alphabet's self-driving unit, Waymo, continues its expansion. The service is now commercially active in eleven cities, with Nashville being the latest addition, and completes 500,000 rides weekly. Waymo aims to operate in 20 markets by year-end and has recently integrated its service into the Lyft app, broadening its accessibility. In February, the unit secured a $16 billion funding round, with Alphabet providing the majority of the capital.

Not all news is positive. In April 2026, Turkey's competition authority launched a formal investigation into Google's advertising and billing practices within the country. The probe is examining how Google sets terms with advertisers and agencies, with potential outcomes ranging from fines to mandated contract changes. The case is in its early stages and is geographically limited to Turkey.

Investor attention is now sharply focused on the quarterly report due April 29th. Analysts will scrutinize the performance of Google Cloud and the core advertising business. In Q4 2025, Google Search revenue grew 17% year-over-year to $63.07 billion, while Google Cloud revenue jumped 48% to $17.66 billion, with the segment's operating income more than doubling to $5.31 billion. For the upcoming Q1 2026 report, the consensus among analysts remains bullish despite an anticipated year-over-year profit dip due to heavy capital expenditure; 55 analysts maintain a "Strong Buy" rating with a median price target of $378.72. The market's reaction will hinge on whether the earnings validate Alphabet's massive investment thesis.