Alphabet Accelerates AI Push with Gemini Deep Think Upgrade

Will the new generation of the model ease concerns about elevated expenditures?

• Upgrade for Gemini 3 Deep Think emphasizes science, research, and engineering
• The stock is roughly 7% lower than after the Q4 results, per Zacks
• 2026 capital expenditure guidance: $175–$185 billion (more than double 2025)

Deep Think aims to bolster research work

Google DeepMind promotes the refreshed Deep Think mode as an aid for assignments that often lack clear guidelines or a single correct answer. Google says the update was developed in close collaboration with scientists and researchers.

The new version is initially available to Google AI Ultra subscribers within the Gemini app. An Early-Access program via the Gemini API is also rolling out for researchers, engineers, and businesses.

Concrete real-world examples highlighted by Google include:
- A Rutgers University mathematician identifying a logical flaw in a scholarly paper that had already cleared a human peer review
- The Wang Lab at Duke University using the tool to optimize fabrication processes for complex crystal growth in semiconductor research
- A Google R&D executive demonstrating a quicker design process for physical components used in assistive devices

In benchmarks, DeepMind reports notable results: 84.6% on ARC-AGI-2 (abstract reasoning), 81.5% on MMMU-Pro (multimodal understanding), and “gold-medal level” performance at the 2025 International Mathematical Olympiad.

Solid performance, but CapEx outlook weighs on sentiment

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

The AI developments come amid a period of pressure for Alphabet stock following the Q4 2025 results released earlier in the month. The company exceeded earnings expectations, yet the outlook for capital spending has sparked discussions about the trajectory of free cash flow.

Key Q4 2025 figures:
- Revenue: $113.83 billion, up 18% year over year
- Diluted earnings per share: $2.82 (consensus $2.61)
- Google Cloud revenue: $17.66 billion, up 48%
- Net income: up 30% year over year

For 2026, Alphabet guided capital expenditures of $175–$185 billion, driven largely by AI and cloud infrastructure investments, including data centers, chips, and servers.

Infrastructure growth and usage trends, plus a key upcoming date

Alphabet also notes robust usage trends: its in-house Gemini models process more than 10 billion tokens per minute via direct API usage. The Gemini app reportedly has over 750 million monthly active users. Google Cloud closed 2025 with an annualized revenue run rate above $70 billion.

On the product side, momentum continued: Project Genie launched at the end of January for AI Ultra customers, and Gemini 3 was integrated directly into the AI-enabled search mode in Q4. YouTube also surpassed $60 billion in annual revenue (advertising plus subscriptions).

The next notable milestone for investors is the release of Alphabet’s subsequent quarterly results on April 23.