Sales and earnings outlook

Net income

The quarter plan's net income, matching earnings of $2.98 a share; no equity-securities gain.

Depreciation of property and equipment

Up from $8.4 billion in the third quarter.

Stock-based compensation expense

Near the third-quarter level.

Deferred income taxes

Continued deferral of research cost deductions.

TPU inventory build, receivables and other assets

Continued TPU inventory build and receivables growing with sales.

Capital spending — model forecast

The guidance midpoint of $200 billion, less $132 billion spent in nine months, leaves $68 billion. 5% is unallocated for non-technical spending the company does not split out.

servers and networking equipment My assumption: 65% of the 95% of spending that is technical infrastructure.

data centers My assumption: 35% of technical infrastructure.

Net income before preferred dividends

Matches the quarter income plan; zero assumed equity-security gains and losses.

Depreciation

Forecast increase as the expanding installed asset base enters service.

Stock-based compensation

Forecast continued technical awards and hiring.

Deferred income taxes

Cash tax depreciation precedes book expense.

Accounts receivable

Seasonal revenue growth outpaces collections.

Inventory

Procurement for the 2027 system-sales ramp precedes shipments.

Accounts payable

Supplier terms fund part of operating procurement.

Accrued expenses and other liabilities

Seasonal year-end compensation and other operating accruals.

Deferred revenue

Some Cloud billings arrive before recognition.

Other operating assets

Prepaid service and operating deposits increase modestly.

Capital spending — model forecast

The $68 billion remaining-quarter spend takes annual purchases to $200 billion, the midpoint of the company's stated annual range. Categories are my estimates, not a disclosed forecast split. About $3 billion cannot responsibly be divided among other property and business uses. Inventory cash is in operating cash flow, not capital spending.

servers and networking equipment My forecast allocation, broadly informed by the latest technical-infrastructure mix.

data centers My construction and commissioning cash-payment forecast, not management's quarterly allocation.

Net income (GAAP)

My Q4 2026 forecast, including an assumed $1.5 billion net loss on equity securities.

Depreciation of property and equipment

My forecast: quarterly depreciation steps up from $8.4 billion in Q3 2026 as the capex ramp is placed in service.

Stock-based compensation expense

My forecast, up from $8.6 billion in Q3 2026 with AI hiring.

Deferred income taxes

My assumption of a modest quarter after the unusual first half.

Assumed net loss on equity securities

Add-back of my assumed non-cash mark-to-market loss on the equity portfolio.

Accounts receivable

My forecast: receivables build with revenue of about $142.5 billion.

Inventory build for TPU system sales and devices

My forecast: the company builds TPU inventory ahead of recognizing the revenue, and Q4 also carries device inventory for the holidays.

Payables, accrued liabilities, deferred revenue, other assets and income taxes

My assumption of a modest net source, typical of a high-spend quarter.

Capital spending — model forecast

These allocations are my forecast assumption, not a company-published split: I apply the company's Q3 2026 disclosure that about 65 percent of technical-infrastructure investment went to servers and networking equipment and 35 percent to data centers, assume roughly 93 percent of Q4 capex is technical infrastructure, and leave the remainder unallocated for office facilities and Other Bets, which the company includes in capex but does not split out.

Servers and networking equipment My assumption: the Q3 share of technical infrastructure held in Q4, applied to the quarter it takes to reach the midpoint of the company's unchanged $195-205 billion full-year guidance.

Data centers My assumption: the remaining share of technical infrastructure.

Adjusted net income before preferred dividends

Forecast earnings excluding equity-securities gains and losses, consistent with the base EPS case; preferred dividends are financing rather than operating cash flow.

Depreciation, stock-based compensation, deferred taxes and other non-cash items

Forecast non-cash add-backs as infrastructure depreciation and employee equity compensation rise.

Working-capital and other operating movements

Forecast seasonal collections and accruals, partly offset by inventory for systems sales.

Capital spending — model forecast

The base case uses the midpoint of the company's 2026 capital-spending range less reported nine-month spending. I allocate 90% using the latest technical-infrastructure mix and leave 10% unallocated for other assets and because no future disaggregated plan was disclosed.

servers and networking equipment My allocation assumes 90% of capital spending is technical infrastructure and 65% of that is this category; this is not a company-issued allocation for the quarter.

data centers My allocation assumes 90% of capital spending is technical infrastructure and 35% of that is data centers; this is not a company-issued allocation for the quarter.

Net income

Fourth quarter 2026 base net income of 39.71 billion dollars matches our quarterly income statement forecast (39.412 billion dollars of net income available to common stockholders for 3.17 dollars per diluted share across 12,440 million shares, plus 298 million dollars of preferred stock dividends, with zero forecasted equity securities gains).

Depreciation of property and equipment

Depreciation increases from 8.369 billion dollars in the third quarter to 9.70 billion dollars in the fourth quarter as third-quarter and fourth-quarter server additions enter service.

Stock-based compensation expense

Stock-based compensation increases modestly from 8.63 billion dollars in the third quarter to 8.90 billion dollars.

Deferred income taxes and other non-cash adjustments

Reflects 1.50 billion dollars of operating deferred tax and amortization adjustments.

Changes in accounts receivable, inventory, and other operating assets and liabilities

Reflects a 3.81 billion dollar net working capital outflow from seasonal fourth-quarter accounts receivable build (+15.3 billion dollars sequential revenue increase) and continued tensor processing unit inventory build, partially offset by higher fourth-quarter accrued expenses, accounts payable, and Cloud deferred revenue, with no repeat of the third quarter's 5.2 billion dollar European Commission fine payment.

Capital spending — model forecast

With 131.953 billion dollars of capital spending reported in the first nine months of 2026, reaching the 200.0 billion dollar midpoint of management's 195 billion to 205 billion dollar full-year guidance implies 68.047 billion dollars of capital spending in the fourth quarter. Following management's third-quarter disclosure that the vast majority of capital spending goes to technical infrastructure (65 percent servers and networking equipment, 35 percent data centers), we allocate 66.3 billion dollars across those two categories and leave 1.747 billion dollars unallocated for office facilities and other corporate assets.

servers and networking equipment Allocates roughly 65 percent of fourth quarter 2026 technical infrastructure capital spending (43.1 billion dollars) to servers and networking equipment.

data centers Allocates roughly 35 percent of fourth quarter 2026 technical infrastructure capital spending (23.2 billion dollars) to data centers.

net income

Forecast GAAP net income on the planned income statement at a 19.5% tax rate, with no equity securities gain assumed, so it equals the adjusted basis.

depreciation of property and equipment

Third quarter was $8.4 billion; the ramp in capital spending lifts this every quarter.

stock-based compensation

Third quarter was $8.6 billion and keeps rising with headcount and awards.

deferred income taxes

Deferred tax added $33.1 billion to cash flow in the first nine months of 2026 and keeps adding.

inventory for TPU systems

The company builds TPU systems into inventory before billing, so cash goes out ahead of revenue.

accounts receivable

Fourth-quarter revenue growth lifts receivables.

other assets

Prepaid capacity, energy and land agreements.

accounts payable and accrued expenses

Payables for components and accrued compensation at year end.

income taxes payable

Timing of quarterly tax payments.

deferred revenue

Cloud and subscription billings collected in advance.

Capital spending — model forecast

The company's quoted plan is only a $195-205 billion range for 2026 with no project-level split, and I take the middle, $68 billion for the fourth quarter. I allocate it with the split the company does disclose for technical infrastructure, about 65% servers and networking equipment and 35% data centers, and treat technical infrastructure as about 96% of total spending, leaving a small amount for Waymo and building work. The amounts are my estimates of spending, not company guidance, and nothing is left unallocated. Timing: component and construction payments catch up toward year end as the ramp the company described continues.

servers and networking equipment My estimate of the 65% servers and networking share of technical infrastructure within a $68 billion fourth quarter.

data centers My estimate of the 35% data-center share of technical infrastructure, including construction payments due in the quarter.

Waymo My estimate of the small remainder outside technical infrastructure, mainly Waymo and building work.

Net income

The quarter plan's net income, matching earnings of $2.95 a share.

Depreciation of property and equipment

Rising from about $9.5 billion in the fourth quarter.

Stock-based compensation expense

Near the recent run rate.

Deferred income taxes

Small continued deferral.

Bonus payments, inventory and receivables

First-quarter bonus payouts, partly offset by fourth-quarter receivables collected.

Capital spending — model forecast

First-quarter spending of $65 billion, a bit under a quarter of my $290 billion for 2027, ramping through the year. 5% is unallocated.

servers and networking equipment My assumption: 65% of 95% technical infrastructure.

data centers My assumption: 35% of technical infrastructure.

Net income before preferred dividends

Matches the quarter income plan; no equity-security gain or loss assumed.

Depreciation

Additional assets begin depreciating after the prior-year ramp.

Stock-based compensation

Continued technical awards and staffing.

Deferred income taxes

Cash tax depreciation timing benefit.

Accounts receivable

Cloud invoices offset much of the seasonal consumer collections benefit.

Inventory

Continued hardware procurement before delivery.

Accrued expenses and other liabilities

Seasonal payment of compensation and operating accruals.

Accounts payable

Operating supplier credit.

Deferred revenue

Some enterprise billings lead recognition.

Other operating assets

Operating deposits and prepayments increase.

Capital spending — model forecast

My $66 billion quarterly spend fits the $290 billion annual base with investment weighted later in the year. Allocations are estimates using disclosed categories, not a management forecast split; the remainder cannot be responsibly allocated.

servers and networking equipment My first-quarter machine and networking forecast as capacity expands.

data centers My construction-payment estimate within the annual base plan.

Net income (GAAP)

My Q1 2027 forecast, matching the quarter plan.

Depreciation of property and equipment

My forecast: quarterly depreciation continues to step up from $8.4 billion in Q3 2026.

Stock-based compensation expense

My forecast, growing with AI hiring.

Deferred income taxes

My assumption of a normal quarter.

Accounts receivable

My forecast: receivables build with revenue.

Inventory build for TPU system sales

My forecast: inventory keeps building ahead of the 2027 revenue ramp.

Other assets, payables, accrued liabilities, deferred revenue and income taxes

My assumption of a modest net source.

Capital spending — model forecast

My own allocation of a quarter of my estimated 2027 capex, using the company's disclosed technical-infrastructure categories; the company has not published a 2027 plan. The unallocated remainder covers office facilities and Other Bets.

Servers and networking equipment My assumption for the first quarter of a significantly higher 2027 capex year, on the recent share.

Data centers My assumption for the data-center share.

Adjusted net income before preferred dividends

Forecast earnings excluding equity-securities gains and losses, consistent with the base quarterly EPS case; preferred dividends are financing rather than operating cash flow.

Depreciation, stock-based compensation, deferred taxes and other non-cash items

Forecast depreciation and employee equity compensation on the expanding infrastructure base.

Working-capital and other operating movements

Forecast first-quarter seasonal compensation payments and systems inventory, partly offset by collections and deferred revenue.

Capital spending — model forecast

The base case assumes quarterly spending is flat with the 2026 fourth-quarter midpoint before rising later in 2027. I allocate 90% using the latest technical-infrastructure mix and leave 10% unallocated for other assets and because no future disaggregated plan was disclosed.

servers and networking equipment My allocation assumes 90% of capital spending is technical infrastructure and 65% of that is this category; this is not company guidance.

data centers My allocation assumes 90% of capital spending is technical infrastructure and 35% of that is data centers; this is not company guidance.

Net income

First quarter 2027 base net income of 39.71 billion dollars equals 39.412 billion dollars of net income available to common stockholders (3.16 dollars per diluted share across 12,480 million shares, with zero forecasted equity securities gains) plus 298 million dollars of preferred stock dividends.

Depreciation of property and equipment

Depreciation rises to 11.0 billion dollars as fourth quarter 2026 and first quarter 2027 server and data center deployments enter service.

Stock-based compensation expense

Reflects 8.8 billion dollars of stock-based compensation expense.

Deferred income taxes and other non-cash adjustments

Reflects 1.2 billion dollars of deferred tax and amortization adjustments.

Changes in accounts receivable, inventory, and other operating assets and liabilities

First quarter working capital outflow is a modest 1.21 billion dollars as seasonal collections of fourth-quarter advertising receivables, cash inflows from tensor processing unit system deliveries, and first-quarter cash tax timing (with federal estimated tax payments due in April) largely offset annual employee bonus payouts.

Capital spending — model forecast

We model first quarter 2027 capital spending of 58.0 billion dollars (up 63 percent year over year from 35.674 billion dollars in the first quarter of 2026 as part of our 250 billion dollar full-year 2027 forecast), allocating 97.5 percent (56.55 billion dollars) to technical infrastructure and leaving 1.45 billion dollars unallocated for office facilities and other corporate assets.

servers and networking equipment Allocates roughly 65 percent of first quarter 2027 technical infrastructure capital spending (36.75 billion dollars) to servers and networking equipment.

data centers Allocates roughly 35 percent of first quarter 2027 technical infrastructure capital spending (19.8 billion dollars) to data center construction.

net income

The planned income statement, at a 20% tax rate, with no equity securities gain assumed, so it equals the adjusted basis.

depreciation of property and equipment

Depreciation steps up again from the fourth quarter as new capacity enters service.

stock-based compensation

Compensation keeps growing with AI hiring.

deferred income taxes

A modest deferred tax benefit.

accounts receivable

Receivables build after the seasonal fourth-quarter peak.

inventory

TPU systems are built into inventory before billing.

other assets

Prepaid capacity and energy.

accounts payable and accrued expenses

Annual bonuses and first-quarter payables.

income taxes payable

Timing of tax payments.

deferred revenue

Cloud billings in advance.

other operating items

Other working capital movements.

Capital spending — model forecast

There is no company quarterly plan; $70 billion is my estimate for the first quarter of 2027, a little above the fourth quarter of 2026 because data center construction keeps ramping, allocated with the disclosed 65% servers and networking, 35% data centers split of technical infrastructure and a small Waymo and building remainder. These are my estimates of spending, not company guidance, and nothing is unallocated.

servers and networking equipment My estimate, about 62% of a $70 billion quarter, with compute purchases still dominant.

data centers My estimate, about 33% of the quarter, for land, power and shells.

Waymo My estimate of Waymo and building spending.

Net income

Reported nine-month net income of $201.2 billion plus the plan's $37.3 billion for the fourth quarter.

Depreciation of property and equipment

$22.0 billion in nine months plus $9.5 billion.

Stock-based compensation expense

$23.3 billion in nine months plus $8.8 billion.

Deferred income taxes

$33.1 billion in nine months plus $2.0 billion.

Loss (gain) on debt and equity securities, net

Nine-month non-cash securities gains; none in the fourth quarter.

Other

Nine-month reported figure.

Changes in assets and liabilities

Nine-month outflow of $30.5 billion plus $7.6 billion in the fourth quarter.

Capital spending — model forecast

Nine-month spending of $132.0 billion plus $68.0 billion, about the guidance midpoint. The yearly split is approximate and 5% is unallocated.

servers and networking equipment My assumption: 65% of the 95% technical-infrastructure share.

data centers My assumption: 35% of technical infrastructure.

Reported-basis net income before preferred dividends

Disclosed nine-month net income plus $36.45 billion in the quarter plan. Adjusted annual earnings exclude equity-security effects; the cash walk instead starts from reported income and removes non-cash gains explicitly.

Depreciation

Disclosed nine-month depreciation plus $10 billion forecast.

Stock-based compensation

Disclosed nine-month stock compensation plus $9.5 billion forecast.

Deferred income taxes

Disclosed nine-month deferred-tax adjustment plus $4 billion forecast.

Debt and equity securities gains and losses

Disclosed nine-month cash-flow reversal; zero fourth-quarter assumption.

Other non-cash operating adjustments

Disclosed nine-month other adjustment; no incremental fourth-quarter amount.

Accounts receivable

Disclosed nine months plus $6.5 billion seasonal cash use.

Inventory

Disclosed nine months plus $5 billion for customer systems awaiting delivery.

Income taxes payable and receivable

Disclosed nine-month movement; no net fourth-quarter timing change.

Other operating assets

Disclosed nine months plus $1 billion operating prepayments.

Accounts payable

Disclosed nine months plus $1 billion forecast.

Accrued expenses and other liabilities

Disclosed nine-month movement plus $5 billion forecast accruals. The historical fine payment is already captured and is not charged twice.

Deferred revenue

Disclosed nine months plus $1.5 billion forecast.

Capital spending — model forecast

The $200 billion annual total is my central estimate within company guidance. Approximately 95% is allocated to the two disclosed technical categories, with the remainder explicitly unallocated. Acquisitions, securities purchases and customer-system inventory are not capital purchases here.

servers and networking equipment My full-year allocation across machines and networking; not an exact disclosed annual split.

data centers My estimated annual construction and commissioning purchases.

Net income (GAAP)

Nine months reported plus my Q4 2026 forecast of $36.5 billion; includes the net gains on equity securities recognized in the first half.

Depreciation of property and equipment

Nine months reported ($21.96 billion) plus about $9.5 billion in Q4 as the technical-infrastructure build ramps.

Stock-based compensation expense

Nine months reported plus about $9.0 billion in Q4, growing with AI hiring.

Deferred income taxes

Nine months reported plus about $1.5 billion in Q4; the first half was unusually high alongside the equity gains.

Net gain on debt and equity securities

Reversal of the non-cash net gains recognized in the first three quarters, plus my assumed $1.5 billion Q4 loss.

Other non-cash items

Nine months reported, flat in Q4.

Accounts receivable

Nine months reported plus a Q4 build with revenue growth.

Inventory build for TPU system sales and devices

Nine months reported plus about $4 billion more in Q4; the company builds TPU inventory ahead of recognizing revenue.

Other assets, payables, accrued liabilities, deferred revenue and income taxes

Residual of my Q4 assumption; the nine months included the $5.2 billion EC fine payment already made.

Capital spending — model forecast

These allocations are my forecast assumption, not a company-published plan: I assume about 95 percent of 2026 capex is technical infrastructure, split between the company's disclosed categories of servers and networking equipment (about 60-65 percent through the year) and data centers (about 35-40 percent), and leave the remainder unallocated for office facilities and Other Bets, which the company includes in capex but does not split out. Full-year capex equals the nine months already reported plus my Q4 forecast.

Servers and networking equipment My assumption: roughly 60-65 percent of technical-infrastructure capex has gone to servers and networking equipment in 2026 (65 percent in Q3), applied to a full year just under the $200 billion midpoint of the company's unchanged $195-205 billion guidance.

Data centers My assumption: the remaining 35-40 percent of technical-infrastructure capex, per the company's Q3 2026 split.

Adjusted net income before preferred dividends

Nine-month adjusted net income plus base-case fourth-quarter earnings, excluding equity-securities gains and losses; preferred dividends are financing rather than operating cash flow.

Depreciation, stock-based compensation, deferred taxes and other non-cash items

Reported nine-month non-cash items adjusted for equity-securities tax effects, plus base-case fourth-quarter non-cash add-backs.

Working-capital and other operating movements

Reported nine-month changes in assets and liabilities of negative $30.530 billion, plus base-case fourth-quarter seasonal collections, accruals and systems inventory of positive $7.6 billion.

Capital spending — model forecast

The base case uses the midpoint of the disclosed 2026 range. I allocate 90% using the latest technical-infrastructure mix and leave 10% unallocated for other assets and because no future disaggregated plan was disclosed.

servers and networking equipment My allocation assumes 90% of capital spending is technical infrastructure and 65% of that is this category; this is not a company-issued annual allocation.

data centers My allocation assumes 90% of capital spending is technical infrastructure and 35% of that is data centers; this is not a company-issued annual allocation.

Net income

Full-year 2026 forecast reported net income of 240.949 billion dollars equals 201.239 billion dollars reported in the first nine months of 2026 plus 39.71 billion dollars in the fourth quarter base case; this includes 99.1 billion dollars of net after-tax equity securities gains from the first nine months (which are excluded from our adjusted net income available to common stockholders of 141.167 billion dollars and adjusted earnings per share of 11.45 dollars, and are reversed in the non-cash line below) and 682 million dollars of preferred stock dividends.

Loss (gain) on debt and equity securities, net

Reverses the 126.755 billion dollars of net pre-tax non-cash gains on debt and equity securities recorded in the first nine months of 2026, with zero assumed in the fourth quarter.

Depreciation of property and equipment

Combines 21.955 billion dollars of reported depreciation in the first nine months of 2026 with 9.70 billion dollars projected in the fourth quarter.

Stock-based compensation expense

Combines 23.338 billion dollars of reported stock-based compensation in the first nine months of 2026 with 8.90 billion dollars projected in the fourth quarter.

Deferred income taxes and other non-cash adjustments

Combines 37.902 billion dollars of deferred income taxes and other non-cash adjustments in the first nine months of 2026 (primarily deferred tax liabilities on unrealized equity securities gains) with 1.50 billion dollars in the fourth quarter.

Changes in accounts receivable, inventory, and other operating assets and liabilities

Combines the 30.53 billion dollar working capital outflow from the first nine months of 2026 (driven by tensor processing unit inventory build, long-term supply prepayments, accounts receivable growth, and the 5.2 billion dollar European Commission fine payment) with a 3.81 billion dollar net working capital outflow in the fourth quarter.

Capital spending — model forecast

Our base 2026 capital spending forecast of 200.0 billion dollars sits at the midpoint of management's 195 billion to 205 billion dollar full-year guidance (131.953 billion dollars reported in the first nine months plus 68.047 billion dollars in the fourth quarter). Based on management's disclosure that the vast majority of capital spending goes to technical infrastructure (split roughly 65 percent to servers and networking equipment and 35 percent to data centers in the third quarter), we allocate 97.5 percent (195.0 billion dollars) across those two categories and leave 2.5 percent (5.0 billion dollars) as unallocated capital spending for office facilities and other corporate assets for which management does not provide a specific guidance percentage.

servers and networking equipment We assume 97.5 percent of full-year 2026 capital spending (195.0 billion dollars) is directed to technical infrastructure and allocate 65 percent of that technical infrastructure spend (126.75 billion dollars) to servers and networking equipment, including tensor processing units and graphics processing units.

data centers We allocate the remaining 35 percent of estimated 2026 technical infrastructure capital spending (68.25 billion dollars) to data center land, building construction, and power infrastructure.

net income

Nine months as reported plus my fourth quarter; it includes the $126.8 billion of non-cash equity securities gains that adjusted earnings per share excludes.

gain on debt and equity securities, net

Removes the non-cash investment gains included in net income.

depreciation of property and equipment

Nine months as reported plus a rising fourth quarter.

stock-based compensation

Nine months as reported plus the fourth quarter.

deferred income taxes

The deferred tax benefit of accelerated capital spending.

other non-cash items

Nine months as reported.

accounts receivable

A year of strong billings.

inventory

Build of TPU systems ahead of delivery and billing.

other assets

Prepaid capacity, energy and land.

accounts payable and accrued expenses

Payables and accruals at year end.

income taxes payable

Nine months as reported plus a fourth-quarter addition.

deferred revenue

Cloud and subscription billings in advance.

Capital spending — model forecast

Nine months of actual spending of $131,953 million plus my $68 billion fourth quarter, the middle of the company's quoted $195-205 billion range, gives $199,953 million. I split it using the only split the company discloses, about 65% servers and networking equipment and 35% data centers for technical infrastructure, with about 4% left for Waymo and building work. These are my spending estimates, not company guidance, and nothing is unallocated.

servers and networking equipment My estimate, splitting the $199,953 million year with the disclosed 65% servers and networking share of technical infrastructure.

data centers My estimate at the disclosed 35% data-center share.

Waymo My estimate of the small non-technical-infrastructure remainder, mostly Waymo and building work.

Net income

Base earnings of $12.35 a share on 12,500 million shares plus preferred dividends.

Depreciation of property and equipment

About $31 billion in 2026 rising as 2026's roughly $200 billion of spending enters service.

Stock-based compensation expense

About 15% growth with AI hiring.

Deferred income taxes

Continued deferral of tax deductions.

TPU inventory and receivables

Inventory and receivables grow with hardware sales.

Capital spending — model forecast

$290 billion, about 45% above 2026, is my reading of 'increase significantly'; it is not guidance. 5% is unallocated.

servers and networking equipment My assumption: 65% of 95% technical infrastructure.

data centers My assumption: 35% of technical infrastructure.

Net income before preferred dividends, excluding equity-security gains and losses

Consistent with $12.95 adjusted earnings on 12.7 billion assumed diluted shares plus $1.2 billion preferred dividends. Equity-security gains and losses are assumed zero.

Depreciation

A larger installed asset base follows the 2026 investment step-up.

Stock-based compensation

Growth in technical compensation and continuing award expense.

Deferred income taxes

Forecast timing benefit from capital tax deductions.

Accounts receivable

Large revenue growth leaves additional invoices outstanding.

Inventory

The larger system-sales business requires continuing procurement ahead of shipment.

Accounts payable

Supplier credit finances some operating purchases.

Accrued expenses and other liabilities

Compensation and other operating accruals grow with scale.

Deferred revenue

Cloud contract billing contributes advance cash.

Other operating assets

Prepayments and deposits grow with activity.

Income taxes payable and receivable

Some settlement of existing tax balances.

Capital spending — model forecast

The $290 billion total is my interpretation of a significant annual increase, not a company dollar plan. Roughly 95% is allocated to disclosed technical categories, shifting somewhat toward construction. Remaining property spending cannot responsibly be assigned by business or project.

servers and networking equipment My central machine and network allocation for a much larger compute footprint.

data centers My forecast of longer-duration construction spending to expand supply.

Net income (GAAP)

My forecast: operating income of about $195 billion at a 31.5 percent margin, plus modest net other income, taxed at about 17.5 percent.

Depreciation of property and equipment

My forecast: depreciation accelerates as the 2026-2027 capex is placed in service, from about $31 billion in 2026.

Stock-based compensation expense

My forecast: continued growth with AI hiring, from $32 billion in 2026.

Deferred income taxes

My forecast: normalizes down from the unusual 2026 level.

Accounts receivable

My forecast: receivables grow with revenue of about $620 billion.

Inventory build for TPU system sales

My forecast: the company builds TPU inventory ahead of the revenue ramp it has guided to for 2027.

Other assets, payables, accrued liabilities, deferred revenue and income taxes

My forecast of a modest net source from payables and deferred revenue.

Capital spending — model forecast

The company has said only that 2027 capex will increase significantly from 2026; the $270 billion total and its split are my own estimate, built by holding the recent servers-versus-data-centers shares and assuming about 94 percent of spend is technical infrastructure. The remainder is unallocated for office facilities and Other Bets, which the company does not split out.

Servers and networking equipment My assumption that the server and networking share stays near the top of the recent 60-65 percent range as TPU production scales.

Data centers My assumption for the long-lived share of technical infrastructure.

Adjusted net income before preferred dividends

Forecast earnings excluding equity-securities gains and losses, consistent with the base annual EPS case; preferred dividends are financing rather than operating cash flow.

Depreciation, stock-based compensation, deferred taxes and other non-cash items

Forecast rising depreciation and employee equity compensation as the infrastructure base expands.

Working-capital and other operating movements

Forecast receivables and systems-inventory growth, partly offset by payables and deferred revenue.

Capital spending — model forecast

The base case translates the company's significant-increase commentary into $290 billion of spending. I allocate 90% using the latest technical-infrastructure mix and leave 10% unallocated for other assets and because no future disaggregated plan was disclosed.

servers and networking equipment My allocation assumes 90% of capital spending is technical infrastructure and 65% of that is this category; this is not company guidance.

data centers My allocation assumes 90% of capital spending is technical infrastructure and 35% of that is data centers; this is not company guidance.

Net income

Base 2027 forecast net income of 175.767 billion dollars equals adjusted net income available to common stockholders of 174.575 billion dollars (13.93 dollars per diluted share across 12,530 million shares, with zero forecasted equity securities gains) plus 1.192 billion dollars of preferred stock dividends.

Depreciation of property and equipment

Depreciation rises from 31.66 billion dollars in 2026 to 52.0 billion dollars in 2027 as the 200 billion dollar 2026 and 250 billion dollar 2027 technical infrastructure cohorts enter service.

Stock-based compensation expense

Stock-based compensation increases 13 percent year over year to 36.5 billion dollars with artificial intelligence engineering and Cloud hiring.

Deferred income taxes and other non-cash adjustments

Reflects 4.5 billion dollars of operating deferred tax and amortization adjustments (including Wiz intangible amortization).

Changes in accounts receivable, inventory, and other operating assets and liabilities

Net working capital outflow narrows from 34.34 billion dollars in 2026 to 8.767 billion dollars in 2027 as the 5.2 billion dollar 2026 European Commission fine payment does not repeat and contracted tensor processing unit system deliveries convert 2026 inventory into customer cash collections.

Capital spending — model forecast

Management guided that 2027 capital spending will increase significantly compared to 2026 (195 billion to 205 billion dollars), supported by 924 billion dollars of purchase commitments as of September 30, 2026. We model 250.0 billion dollars of total capital spending in 2027 (+25 percent year over year), allocating 97.48 percent (243.7 billion dollars) to technical infrastructure across servers and networking equipment (158.4 billion dollars) and data centers (85.3 billion dollars), while leaving 6.3 billion dollars (2.52 percent) unallocated for office facilities and corporate assets.

servers and networking equipment Allocates roughly 65 percent of 2027 technical infrastructure capital spending (158.4 billion dollars) to eighth-generation tensor processing units, graphics processing units, servers, and optical networking equipment.

data centers Allocates roughly 35 percent of 2027 technical infrastructure capital spending (85.3 billion dollars) to data center construction, land, and energy infrastructure.

net income

Operating income of $177.5 billion plus $8 billion of net interest and other income, taxed at 20%, with no equity securities gains assumed.

depreciation of property and equipment

Depreciation roughly doubles from 2025 as the 2025 and 2026 capital vintages enter service.

stock-based compensation

Compensation growth in AI and cloud.

deferred income taxes

A modest deferred tax benefit.

accounts receivable

Receivables grow with revenue.

inventory

TPU systems are built into inventory before billing, on signed contracts.

other assets

Prepaid capacity, energy and land.

accounts payable and accrued expenses

Payables rise with the spending ramp.

income taxes payable

Timing of tax payments.

deferred revenue

Cloud billings in advance.

other operating items

Other working capital movements.

Capital spending — model forecast

The company says 2027 capital spending will increase significantly from 2026 but gives no number or project split; $300 billion is my estimate, near the run rate implied by the fourth quarter of 2026, and it is my assumption, not guidance. I allocate it with the disclosed 65% servers and networking, 35% data centers split of technical infrastructure, tilted toward servers because compute purchases lead, plus Waymo and building spend. Nothing is unallocated.

servers and networking equipment My estimate, about 62% of the year, as TPU systems and GPU capacity dominate purchases.

data centers My estimate, about 32% of the year for land, power and shells.

Waymo My estimate of Waymo and building spending as Waymo expands in the United States and abroad.

Net income

Base earnings of $14.30 a share on 12,580 million shares plus preferred dividends.

Depreciation of property and equipment

2026-2027 server spending depreciated over about six years.

Stock-based compensation expense

About 13% growth.

Deferred income taxes

Continued deferral.

TPU inventory and receivables

Growth of the hardware business.

Capital spending — model forecast

Spending growth slows to about 14%; my assumption, with no company guidance for 2028. 5% is unallocated.

servers and networking equipment My assumption: 65% of 95% technical infrastructure.

data centers My assumption: 35% of technical infrastructure.

Net income before preferred dividends, excluding equity-security gains and losses

Base $16.30 adjusted earnings on 12.9 billion assumed diluted shares plus $1.2 billion preferred dividends; zero equity-security effects.

Depreciation

Large 2026 and 2027 installations produce substantially higher expense.

Stock-based compensation

Further technical compensation growth.

Deferred income taxes

Continuing tax versus book timing differences.

Accounts receivable

Growth in annual sales produces more outstanding customer balances.

Inventory

A maturing delivery cycle improves turnover but still requires inventory investment.

Accounts payable

Operating purchases and supplier terms provide partial funding.

Accrued expenses and other liabilities

Operating accruals scale with the business.

Deferred revenue

Advance enterprise billing grows.

Other operating assets

Prepayments and operating deposits remain a cash use.

Income taxes payable and receivable

Cash payment of tax balances.

Capital spending — model forecast

The $350 billion total is my assumption, not company guidance. Category estimates allow a somewhat greater construction share than the latest quarter. Other property and business allocations remain uncertain and are left explicit rather than forced into a precise project split.

servers and networking equipment My continued compute expansion estimate after the sharper prior-year ramp.

data centers My longer-duration construction forecast for additional supply.

Net income (GAAP)

My forecast: operating income of about $229 billion at a 31 percent margin on revenue of about $740 billion.

Depreciation of property and equipment

My forecast: depreciation keeps rising with the 2027-2028 build.

Stock-based compensation expense

My forecast of continued growth.

Deferred income taxes

My assumption.

Accounts receivable

My forecast: receivables grow with revenue.

Inventory build for TPU system sales

My forecast: the inventory cycle eases as deliveries and billings catch up with the build.

Other assets, payables, accrued liabilities, deferred revenue and income taxes

My assumption of a modest net source.

Capital spending — model forecast

Entirely my own estimate: the company has given no 2028 capex guidance. I assume growth continues but moderates, with about 93 percent of spend in technical infrastructure split on the recent shares, and the remainder unallocated for office facilities and Other Bets.

Servers and networking equipment My assumption that the server and networking share holds near its recent range.

Data centers My assumption for the long-lived share of technical infrastructure.

Adjusted net income before preferred dividends

Forecast earnings excluding equity-securities gains and losses, consistent with the base annual EPS case; preferred dividends are financing rather than operating cash flow.

Depreciation, stock-based compensation, deferred taxes and other non-cash items

Forecast depreciation and employee equity compensation on the larger infrastructure base.

Working-capital and other operating movements

Forecast working-capital investment to support a larger business and systems sales.

Capital spending — model forecast

The base case assumes a smaller increase than in 2027 as the investment program matures. I allocate 90% using the latest technical-infrastructure mix and leave 10% unallocated for other assets and because no future disaggregated plan was disclosed.