GOOGL: Alphabet Stock Ticks Up as Google Strikes $10 Billion Cloud Deal with Meta

Zuck’s spending spree pivoted from hiring top AI talent to dumping over $10 billion for Google’s AI-enabling cloud services.

☁️ A $10B Vote of Confidence

• Alphabet stock GOOGL edged higher by 1.2% pre-market Friday after reports surfaced that Meta META has agreed to spend over $10 billion on Google cloud services in a six-year deal.
• The contract is aimed squarely at supercharging AI infrastructure and covers servers, storage, networking, and advanced cloud infrastructure, according to sources cited by The Information.
• For Google, it’s a high-profile win against rivals Amazon AMZN and Microsoft MSFT; for Meta, it’s a deep dive into AI’s data-hungry future.

🤖 AI Spending Spree Continues

• For Google Cloud, this is a strategic milestone — adding Meta to its client roster strengthens its enterprise AI credibility and intensifies competition with AWS and Microsoft Azure.
• It also positions Google as a core AI enabler, allowing Meta to scale its struggling AI models and integrate AI-driven experiences across Facebook, Instagram, WhatsApp, and Threads.
• Meta’s pivot from metaverse hype to AI domination is reflected in its financials. The company raised its 2025 capital expenditure forecast by $2 billion to $66 billion–$72 billion, most of it earmarked for AI infrastructure and top-tier talent.

💰 Meta Pumps Up the Expense Column

• Its overall expense forecast for next year now sits at $114 billion–$118 billion, underscoring CEO Mark Zuckerberg’s aggressive push to shove AI into every corner of Meta’s ecosystem.
• The deal accelerates Meta’s ability to deploy large-scale AI systems without having to build all the physical infrastructure itself, leveraging Google’s existing capabilities instead.
• Despite the long-term AI investment story, Meta stock is down about 6% from its all-time high of $790 and is looking to open Friday’s trading at around $740 a pop.

🔎 Why This Deal Matters

• There are also expectations that the deal could deliver a meaningful cloud revenue boost to Google. Even with the recent dip, Meta is still up 23% year to date, while Alphabet has gained about 5%, showing clearly who the outperformer is.
• But this isn’t just a cloud deal. It’s an AI arms race escalation. With Big Tech pouring nearly $350 billion into AI capex this year, Meta’s alignment with Google marks a strategic shift away from total self-reliance and toward hybrid infrastructure partnerships.
• Investors are watching closely: could this deal reshape market share dynamics in the cloud space over the next few years as AI workloads explode?