<div id="readability-page-1">One needs to spend money to make money, a lesson that Alphabet (NASDAQ:GOOGL) seems to have taken firmly to heart. The company is guiding for $91–$93 billion in capex for 2025, the bulk of which will go toward building out its AI and cloud infrastructure.<h3>Claim 50% Off TipRanks Premium and Invest with Confidence </h3><ul><li>Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions </li><li> Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential</li></ul> Alphabet is clearly aiming to be one of the big AI winners, and the company's surging cloud revenues in Q3 2025 – which grew 34% year over year to reach $15.2 billion – provide solid evidence that the strategy is working. Moreover, despite the massive capital outlay, Alphabet appears to have ample cash to fund its ambitions, delivering a net gain of $12.8 billion during the most recent quarter. However, this spending spree (by Alphabet as well as its hyperscaler peers) has raised some eyebrows, with markets abuzz over fears that an AI bubble may be forming. While GOOGL's share price has more than doubled since hitting an early-April low, it has pulled back in recent weeks amid these concerns. Still, top investor Daniel Sparks acknowledges the risks but believes there is upside potential beginning to emerge. &#34;Alphabet's cloud story is real,&#34; declares the 5-star investor, who is among the top 1% of stock pros covered by TipRanks. Sparks notes that Google Cloud is becoming an increasingly vital segment for Alphabet, with revenues growing at a faster clip than the company's legacy advertising business. In addition, the investor cites Google Cloud's $155 billion backlog as a solid indication that more revenues are on the horizon. &#34;Google Cloud is no longer just a fast-growing segment inside a bigger advertising company,&#34; emphasizes Sparks. &#34;It's becoming a profit contributor that can meaningfully influence Alphabet's overall growth profile.&#34; The investor points out that Google Cloud has the potential to serve as a &#34;second pillar of growth&#34; for the search engine giant. Sparks adds that cloud computing, which is driven by IT stacks and generative AI compute needs, also has the advantage of not being cyclical like advertising sales. Still, GOOGL's bull run over the past few months has made the stock somewhat pricey, and it now trades at a price-to-earnings multiple of around 30x. If Alphabet's growth begins to slow, especially its Google Cloud segment, Sparks warns that this valuation could begin to compress. But it's a risk he's willing to take. &#34;Ultimately, however, I believe that Alphabet's diversified business is worth paying up for – especially when considering the momentum the company has in cloud,&#34; concludes Sparks. (To watch Daniel Sparks' track record, click here) Wall Street doesn't seem too bothered by Alphabet's massive capex either. Backed by 29 Buys and 7 Holds, GOOGL carries a Strong Buy consensus rating. (See GOOGL stock forecast) </div>

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Top investor Daniel Sparks believes Alphabet's significant investment in AI and cloud infrastructure is paying off, with Google Cloud's revenues growing 34% year over year in Q3 2025. Despite concerns of an AI bubble and a high price-to-earnings ratio, Sparks sees Google Cloud as a vital growth driver for Alphabet. Wall Street remains optimistic, with GOOGL holding a Strong Buy consensus rating.

- Alphabet (NASDAQ: GOOGL) plans to spend $91–$93 billion in capital expenditures for 2025, mainly on AI and cloud infrastructure.  
- The company's cloud revenues surged 34% year over year in Q3 2025, reaching $15.2 billion, indicating that this strategy is effective.  
- Despite concerns of an AI bubble and a pricey valuation, investor Daniel Sparks believes in Alphabet's growth potential, highlighting Google Cloud's significant revenue backlog and its emergence as a key growth driver.

'The Clouds Are the Limit,' Says Top Investor About Alphabet Stock