Institutional Investors Clash Over Alphabet’s Trajectory

Alphabet has delivered a standout performance in the markets this year, significantly outpacing most of its peers in the "Magnificent Seven" cohort. However, at current valuation levels, a clear divergence in sentiment has emerged among major institutional players. Some are locking in profits, while others are making substantial bets on the company's artificial intelligence roadmap and autonomous driving ambitions for 2026.

Recent regulatory filings reveal a fascinating split in investment behavior. Charles Schwab Trust Co. executed an aggressive accumulation of Alphabet shares, expanding its stake by a remarkable 434.5 percent. This move signals profound confidence that the technology behemoth will successfully monetize its substantial investments in AI infrastructure.

In stark contrast, Clarius Group moved in the opposite direction, trimming its holdings by nearly 24 percent. Following an approximate 70 percent surge in the share price since the start of the year, this activity represents a classic profit-taking maneuver. The opposing actions highlight the central debate on Wall Street: is the near-term growth story fully priced in, or is the next major leap, driven by AI, still on the horizon?

The Coming Capex Surge and Strategic Moves

Investor attention is pivoting from pure revenue figures to capital allocation. Having surpassed the $100 billion quarterly revenue milestone in Q3, the market is bracing for a capital-intensive phase leading into 2026. Analysts are forecasting capital expenditure (CapEx) in the range of $90 to $95 billion. These funds are earmarked primarily for expanding AI data centers and developing proprietary Tensor Processing Units (TPUs), crucial for maintaining a competitive edge.

Should investors sell immediately? Or is it worth buying Alphabet?

Concurrently, Alphabet is addressing the significant energy demands of future AI systems like Gemini 3. The recently announced acquisition of Intersect on December 22 is a strategic play to secure long-term power supply for its massive computational needs.

Waymo: An Embedded Call Option

Beyond the core business, Alphabet's autonomous driving subsidiary, Waymo, is attracting increased focus. Reports of a potential capital raise at a valuation between $100 and $110 billion suggest significant latent value may be unlocked. Market experts view Waymo's evolution from a research initiative to a revenue-generating enterprise as a potential catalyst not yet fully reflected in the parent company's stock price.

Despite facing regulatory headwinds in the EU, particularly from the Digital Markets Act, Alphabet's immensely profitable advertising arm continues to provide the financial firepower to fund these ambitious, long-term bets internally.

Technical and Fundamental Crossroads

From a chart perspective, the equity is currently contending with the $313 level, with resistance near $330 seen as the next key threshold. Fundamentally, a critical moment will arrive in late January 2026 with the release of Alphabet's fourth-quarter earnings. At that time, the market will scrutinize management's margin guidance, as rising depreciation charges linked to the aggressive AI investment cycle are expected to increasingly impact the balance sheet.