Why Cathie Wood Just Loaded Up on Alphabet (GOOGL) Stock

TLDR

• Cathie Wood’s ARK Invest bought 31,505 Alphabet (GOOGL) shares worth $10.4 million on February 6, buying the dip after a 2.5% stock decline
• ARK trimmed positions in Coinbase (COIN) following a 13% rally and reduced holdings in Roku (ROKU)
• Alphabet reported Q4 2025 revenue growth of 18%, beating expectations, with Cloud revenue surging 48% year-over-year
• Multiple Wall Street firms raised price targets, with Piper Sandler increasing to $395 and JPMorgan to $395
• Alphabet’s capital expenditure guidance jumped to $180 billion for 2026, up from $110 billion estimates, pressuring free cash flow

Cathie Wood made a contrarian bet on Alphabet Inc. on Friday. Her ARK Invest funds purchased shares after the stock fell on concerns about higher spending.

ARK bought 31,505 shares worth approximately $10.4 million on February 6. The purchase came as GOOGL stock dropped 2.5% to close at $165.12.

Alphabet Inc., GOOGL

The stock declined despite strong quarterly results. Investors reacted negatively to Alphabet’s capital spending guidance for 2026.

Wood appears to be betting on Alphabet’s long-term artificial intelligence and cloud computing potential. The purchase represents a classic “buy the dip” strategy.

Meanwhile, ARK reduced its exposure to Coinbase Global Inc. The crypto exchange platform had rallied 13% before the trim.

ARK also cut its position in Roku Inc. streaming services. These moves suggest portfolio rebalancing rather than a shift in technology sector conviction.

Strong Quarter Drives Analyst Upgrades

Alphabet delivered impressive fourth-quarter 2025 results that beat Wall Street expectations. Total revenue accelerated to 18% growth, surpassing the 15.5% forecast.

EBITDA came in roughly 2% above analyst predictions. The Search segment and Cloud division both showed acceleration during the quarter.

Google Cloud revenue jumped 48% year-over-year. Cloud backlog expanded to $240 billion from $155 billion in the previous quarter.

YouTube growth decelerated during the period. However, the overall performance was strong enough to prompt multiple analyst upgrades.

Piper Sandler raised its price target from $365 to $395. The firm maintained its Overweight rating on the stock.

JPMorgan increased its target to $395, highlighting accelerating growth in core segments. BMO Capital lifted its target to $400.

Capital Spending Concerns Weigh on Stock

Alphabet’s management projected 2026 capital expenditures at approximately $180 billion. This figure far exceeds the previous estimate of $110 billion.

The increased spending will pressure free cash flow in the coming year. Investors sold shares on concerns about return on investment.

DA Davidson raised its price target to $310 despite the spending concerns. The firm emphasized strong earnings and Cloud division acceleration.

Cantor Fitzgerald reiterated its Overweight rating with a $370 price target. Revenues and EBIT exceeded estimates in the latest quarter.

Stifel adjusted its price target to $395. The firm pointed to Cloud growth and increased backlog as positive indicators.

The consensus among analysts remains bullish on Alphabet’s long-term prospects. Most firms see the increased spending as necessary for AI competitiveness.

Wood’s ARK Invest appears to share this view. The fund’s purchase suggests confidence that short-term spending concerns are overdone.

Alphabet closed Friday’s session at $165.12 per share. The stock remains down year-to-date as investors digest the new spending plans.

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