TLDR
- ARK Invest bought 31,505 Alphabet shares for $10.4 million as stock dropped 2.5% to $165.12 on February 6
- Alphabet’s Q4 2025 revenue rose 18% with Google Cloud revenue climbing 48% year-over-year
- Analysts including Piper Sandler and JPMorgan raised price targets to $395-$400 after earnings beat
- Stock declined despite strong results due to $180 billion 2026 capex guidance, up from $110 billion
- ARK cut Coinbase holdings after 13% rally and reduced Roku position in portfolio adjustment
Cathie Wood bought Alphabet Inc. shares Friday while other investors sold. Her ARK Invest funds added to positions as the stock retreated on spending concerns.
ARK purchased 31,505 shares valued at about $10.4 million on February 6. The stock fell 2.5% to close at $165.12 during the same session.
Wood’s purchase followed Alphabet’s disclosure of higher capital expenditure plans. The buy signals confidence in the company’s AI and cloud strategy.
ARK believes the market overreacted to near-term spending increases. The firm appears focused on long-term growth potential rather than short-term pressures.
At the same time, ARK reduced its Coinbase exposure after a 13% stock rally. The fund also trimmed Roku shares as part of broader portfolio moves.
Strong Earnings Prompt Analyst Upgrades
Alphabet delivered fourth-quarter 2025 results that surpassed expectations. Revenue growth accelerated to 18%, beating the Street’s 15.5% projection.
Google Cloud stood out with 48% revenue growth compared to last year. The cloud backlog jumped to $240 billion from $155 billion in the previous quarter.
Search revenue also showed acceleration during the period. EBITDA exceeded forecasts by roughly 2%.
Piper Sandler increased its price target from $365 to $395 after the report. The firm highlighted strong execution across all business segments.
JPMorgan lifted its target to $395, citing momentum in core operations. BMO Capital raised its target to $400, the highest among major firms.
DA Davidson boosted its price target to $310 based on Cloud strength. Cantor Fitzgerald kept its $370 target with an Overweight rating intact.
Stifel raised its target to $395, pointing to continued Cloud expansion. Wall Street remains broadly positive on the stock’s prospects.
Higher Spending Plans Trigger Selloff
Alphabet’s management guided to approximately $180 billion in capital expenditures for 2026. The figure substantially exceeds the prior $110 billion estimate.
The increased spending will impact free cash flow in the near term. Investors questioned the return timeline on AI infrastructure investments.
YouTube growth decelerated compared to other business units. The slower pace added to concerns about overall business momentum.
GOOGL closed at $165.12 on Friday after the selloff. The stock has faced pressure as the market digests spending implications.
Wood’s purchase suggests ARK views the weakness as temporary. The fund likely sees value at current price levels.
Analysts generally support the higher spending as strategically necessary. Most believe the investments will drive future revenue growth.
The stock now trades below most Wall Street price targets. ARK’s action reinforces the view that shares are undervalued.
Alphabet’s expanded Cloud backlog indicates strong customer demand ahead. This metric provides confidence in future revenue generation.
Wood is betting on AI leadership benefits outweighing short-term costs. The purchase reflects conviction in Alphabet’s competitive position.
