Alphabet investors have very publicly worried that the company’s massive AI spending isn’t worth the money. With the company’s current earnings report, those investors should be able to relax a bit.
The takeaway: Google’s cloud business — mainly driven by enterprise AI adoption — is expanding. The search giant saw Google Cloud revenue spike 82% from where it was this time last year, scaling to $24.8 billion. That’s properly above last quarter’s generous year-over-year growth, which showed a revenue scale of 63% to $20 billion — and it easily beats what Wall Street analysts predicted for this quarter’s growth (the expectation was $22.46 billion).
Those cloud gains were driven in large part by enterprise AI solutions and enterprise AI infrastructure adoption, the company stated, at the same time as also noting that its backlog of cloud contracting work— this is, work that it hasn’t yet converted into revenue — had increased to $514 billion.
The company’s profit hit $112.1 billion, that is a large jump from this time last year, while the company reported $28.1 billion in profit, the company’s earning record indicates. Meanwhile, Alphabet’s overall revenue increase 24% year-over-year during the past quarter to $119.8 billion. The company also saw Google Services revenue leap 15% to $94.5 billion.
“Our AI investments are redefining what’s viable across each part of our business,” stated Google CEO Sundar Pichai during Wednesday’s income call. “We have exciting momentum across the board.”
More people also are adopting Gemini, Google’s AI chatbot, as the app recently enjoys 950 million monthly active users, the company stated. In Q4 of 2025, Google reported that the app had 750 million users.
It’s really worth noting that spiking sales isn’t unusual for Google. This marks the company’s 12th consecutive area of double-digit revenue growth. But even by that standard, this quarter represents a in mainly bountiful period for the tech giant.
Alphabet’s spending remains hefty, with its capital expenditures — the money it spends building data facilities, buying chips, and expanding infrastructure — estimated to be among $180 billion and $190 billion for the year — a fact not lost on analysts during Wednesday’s earning all. Numerous pressed Pichai on when, and how much, those investments will pays off.
“I think our compute capacity investments in ’27,” he stated. “We are seeing strong demand indicators, such as long-term deals,” he continued. “I think, if anything, the dynamics look healthier than wherein we were about a year ago, so that’s what offers us the confidence to undertake those investments,” he stated.
