San Francisco — Alphabet’s first-quarter results came with a clear message to Wall Street: the company is embarking on a new spending binge to chase its biggest rivals. Google’s parent posted the strongest sales growth in almost four years on Monday, indicating marketers kept flocking to its services amid rising scrutiny of digital advertising. However, the company also spent at historic levels, nearly tripling capital expenditure (capex) for the quarter to $7.7bn. Almost all of that spending went to buttress newer cloud and consumer-device businesses that lag behind leaders and Apple. After neglecting these markets for years for its main advertising businesses and riskier moonshot bets, Alphabet is now splurging to catch up. “The big story from the results was the significant rise in expenses,” Brian Wieser, an analyst at Pivotal Research Group, wrote in a note to investors. Other tech giants are spending prodigiously, too, as they hunt for new markets. In the fourth qua...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00.