AMD reports $34.6 billion revenue as Google plans $175 billion AI spend

Key Takeaways

• AMD reported record Q4 revenue of $10.3 billion and 2025 revenue of $34.6 billion, but its stock fell 17% after its Q4 report.
• Alphabet's Q4 sales rose 18% to $113.8 billion, with Google search sales at $63.1 billion, and plans to spend $175-185 billion on AI in 2026.
• Alphabet raised $20 billion and $15 billion through separate bond sales to fund its significant AI infrastructure investments, competing with Microsoft and Amazon.
• Retail investors injected $176 million into BlackRock's iShares Expanded Tech-Software Sector ETF, buying software stocks despite AI disruption fears.
• AI tools like Altruist's Hazel AI tax planning platform and Anthropic's Claude Cowork are causing concerns about disruption in financial services and traditional software.
• Tem, an energy startup, raised $75 million in Series B funding for its AI-powered Rosso engine, aiming to cut energy prices by up to 30%.
• IBM generated $12.5 billion in generative AI revenue and has $23.6 billion in annual recurring AI-related software revenue, positioning itself as a full-stack AI provider.
• ZoomInfo reported Q4 revenue of $319.1 million, with its AI-powered Copilot platform accounting for over 20% of its total annual contract value.
• Micron Technology is expected to see strong growth in 2026 due to high demand for its DRAM and NAND memory chips for AI data centers.
• Major tech companies, including Alphabet and Meta Platforms, plan significant increases in AI infrastructure spending in 2026, boosting demand for memory chips.

AMD and Alphabet AI Stocks Face Investor Scrutiny

AMD and Alphabet both had strong financial results in 2025 with record revenues. However, Wall Street reacted negatively to parts of their latest earnings reports, causing their stock prices to drop. AMD reported record Q4 revenue of $10.3 billion and expects 32% growth in Q1 2026. Alphabet's Q4 sales rose 18% to $113.8 billion, with Google search engine sales reaching $63.1 billion due to AI. Alphabet plans to spend $175-185 billion on AI in 2026, which concerned investors. Despite recent drops, both companies now have similar stock valuations, but Alphabet offers a small dividend and dominates the search market.

AMD Stock Expected to Recover Quickly After Recent Dip

Investors sold off shares of chipmaker AMD after its fourth-quarter report, causing the stock to fall 17% on February 4. Despite this, AMD's 2025 revenue grew 34% to $34.6 billion, and net income reached $4.3 billion. The company's Q1 2026 revenue guidance of $9.5 billion to $10.1 billion, while strong, was slightly below some analyst expectations. However, AMD's forward P/E ratio is near the S&P 500 average, and analysts predict strong revenue growth of 34% in 2026 and 37% in 2027. Experts also expect AMD's MI450 AI accelerator to perform well, suggesting a quick recovery for the stock.

AMD and Alphabet AI Stocks Show Strong 2025 Results

Both AMD and Alphabet achieved strong financial results in 2025, including record revenue growth. Despite this, Wall Street reacted negatively to their latest earnings reports, causing both companies' share prices to drop. AMD's Q4 revenue hit a record $10.3 billion, with a Q1 2026 forecast of $9.8 billion. Alphabet's Q4 sales soared 18% to $113.8 billion, driven by its Google search engine and AI. Alphabet plans significant capital expenditures for AI in 2026, estimated between $175 billion and $185 billion. While AMD does not pay a dividend, Alphabet offers a modest 0.25% yield and holds a dominant 91% market share in search.

Retail Investors Buy Software Stocks Despite AI Concerns

Retail investors bought a record amount of software and tech stocks last week, even with worries about AI disruption. Net inflows into BlackRock's iShares Expanded Tech-Software Sector ETF reached $176 million over one month. This happened after a heavy selloff and fears that new AI tools, like Anthropic's Claude Cowork agent plug-ins, could challenge traditional software companies. The iShares Tech-Software ETF has lost almost 20% of its value this year, but retail investors used the dip to buy shares.

Software Stocks See Record Investor Inflows Despite AI Fears

Retail investors are buying software and tech stocks at record levels, ignoring concerns about AI disruption. BlackRock's iShares Expanded Tech-Software Sector ETF saw $176 million in net inflows over the past month, more than double the 2020 peak. This surge in investment comes despite worries that AI chatbots like ChatGPT could automate tasks, potentially leading to job losses or less demand for some software. However, investors seem to believe AI's benefits will outweigh the risks. The IGV fund has gained 37% this year, outperforming the S&P 500.

AI Threat Hits Financial Stocks After New Tax Tool Launch

Shares of financial services firms dropped on Tuesday after a new AI-powered tax planning tool was launched. Tech platform Altruist introduced this tool within its Hazel AI platform, promising to complete tax planning work in minutes. Investors are concerned that AI could replace profitable services offered by financial advisor firms or reduce their profits. LPL Financial Holdings Inc. saw its stock close 8% lower due to these worries. This follows a similar trend where AI threats previously impacted software stocks.

Tem Raises 75 Million Dollars to Transform Energy Markets with AI

Tem, an energy startup, raised $75 million in Series B funding, valuing the company at over $300 million. The funding round was led by Lightspeed Venture Partners and included several other investors. Tem uses an AI-powered engine called Rosso to connect electricity generators with consumers, aiming to cut energy prices by up to 30%. The company currently serves over 2,600 business customers in the UK, including Boohoo Group and Fever-Tree. Tem plans to use the new funds to expand into Australia and the US, starting with Texas. Its CEO, Joe McDonald, envisions Rosso becoming a core infrastructure for the energy market, similar to AWS or Stripe.

Alphabet Sells 20 Billion Dollars in Bonds for AI Investment

Alphabet sold $20 billion worth of bonds in a seven-part offering, with maturities extending to 2066. This major bond sale, its largest since 2020, will help fund the company's increasing spending on artificial intelligence infrastructure. The proceeds will be used for general corporate needs, including capital expenditures and potential acquisitions. Alphabet is heavily investing in AI, particularly in its Google Cloud division, to compete with rivals like Microsoft and Amazon. This move highlights a growing trend among tech giants to use debt to finance strategic AI investments.

IBM Emerges as a Strong Contender in AI Market

International Business Machines, or IBM, is becoming a significant player in the artificial intelligence market, despite often being overlooked. Unlike companies focused on consumer AI or just chips, IBM offers complete AI systems that combine hardware, software, and services for businesses. Its generative AI offerings have already generated $12.5 billion in revenue, largely from consulting, with a $32 billion consulting backlog. IBM's recurring software revenue, much of it AI-related, is now $23.6 billion annually. The company reported $67.5 billion in revenue for 2025, a 6% increase from 2024, showing strong growth in its AI-driven business model.

ZoomInfo Reports Strong Q4 Results Despite Market Concerns

ZoomInfo, a go-to-market intelligence provider, announced strong Q4 2025 results, beating Wall Street's revenue and profit expectations. The company reported $319.1 million in revenue, a 3.2% increase from last year. ZoomInfo is shifting its focus to larger enterprise customers, which now make up 74% of its business and show double-digit growth. Its AI-powered Copilot platform is gaining traction, accounting for over 20% of total annual contract value. Despite these positive developments, the market reacted negatively to the results due to ongoing challenges in the smaller business market and changes in AI and SEO affecting customer acquisition.

Micron Technology Poised for Strong Growth in AI Market

Micron Technology, a memory chip manufacturer, is expected to be a strong performer in the AI market for 2026. The company saw its fiscal first-quarter earnings jump by 167% year over year, with gross margins increasing to 56%. Micron designs DRAM and NAND flash memory chips crucial for AI data centers. Experts predict memory chip prices could double this year due to high demand. Major tech companies like Alphabet and Meta Platforms plan to significantly increase their AI infrastructure spending in 2026, further boosting demand for Micron's products. With a P/E ratio of 36, Micron is currently valued lower than the tech sector average.

Alphabet Funds AI Growth with 15 Billion Dollar Bond Sale

Alphabet, the parent company of Google and YouTube, raised $15 billion through a bond sale and secured long-term solar energy deals. This funding strategy aims to support the company's significant investment in AI data centers. As AI models become more complex, they need vast data center capacity and reliable power, which can strain supply chains and energy grids. This move shows how a major tech company is combining financial strategies with infrastructure and power needs to fuel its AI expansion. Investors should watch interest costs, AI infrastructure progress, and how power deals affect profits.

Sources

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