Google CEO Sundar Pichai addresses the crowd during Google’s annual I\/O developers conference in Mountain View, California on May 20, 2025. <\/p>\n
Camille Cohen | Afp | Getty Images<\/p>\n
Investors can have a reputation of being penny pinchers. For one, they tend to push up share prices on layoff announcements<\/a> because of the associated cost savings. Accordingly, when a company reports slow revenue growth or an increase in spending, it’s more often than not punished in the stock market<\/a>.<\/p>\n After the bell on Wednesday, Alphabet said it would be spending $85 billion on infrastructure<\/a> as it expands its artificial intelligence strategy this year. That’s $10 billion more than it forecast in February<\/a> \u2014 which had already overshot the $58.84 billion estimated by Wall Street.<\/p>\n Alphabet said it was raising expenditure because of “strong and growing demand for our Cloud products and services” \u2014 of which revenue in the second quarter jumped 32% from a year ago.\u00a0<\/p>\n Despite the increased spending \u2014 which is no small amount \u2014 the Google parent saw its shares rise as much as 3% in extended trading, though it’s pared some of its gains. In other words, investors seem confident \u2014 albeit slightly \u2014 that the investment in AI can finally be properly monetized and translate into higher revenue.<\/p>\n A penny saved might be a penny earned, but a penny invested properly can be a pound in return.<\/p>\n What you need to know today<\/p>\n Donald Trump will visit the U.S. Federal Reserve on Thursday. This is the first time in nearly two decades that an American president will be making an official trip to the central bank, and marks a symbolic move on the Fed’s independence<\/a>.<\/p>\n Alphabet’s second-quarter earnings beat expectations. However, the Google<\/a> parent also said that, this year, it would be investing $10 billion more than previously<\/a> announced in capital expenditures related to artificial intelligence.<\/p>\n Deutsche Bank tops earnings forecasts. Net profit attributable to shareholders<\/a> reached 1.485 billion euros ($1.748 billion) in the second quarter, compared with a 1.2 billion estimate from Reuters.<\/p>\n The Nasdaq Composite closes above 21,000 for the first time. The S&P 500<\/a> and Dow Jones Industrial Average<\/a> also rose on Wednesday.<\/a> Asia-Pacific markets mostly climbed<\/a> Thursday. Japan’s Topix, a broad-based index that tracks all domestic firms, hit a record high.<\/p>\n [PRO] There’s a buzz around ‘neoclouds.’ Investors like these companies, which specialize in\u00a0artificial intelligence cloud computing, because they’re more cost-effective for clients than traditional hyperscalers. But risks are starting<\/a> to appear.<\/p>\n