Alphabet investors have very publicly anxious that the company’s massive AI spending isn’t worth the money. With the company’s latest earnings report, those investors should be able to relax a bit.
The first step: Google’s cloud business—driven in large part by the adoption of enterprise artificial intelligence—is booming. The search giant saw Google Cloud revenue jump 82% from this time last year to $24.8 billion. That’s much higher than last quarter’s generous year-over-year growth, which saw revenue jump 63% to $20 billion — and easily beats what Wall Street analysts were expecting for this quarter’s growth (the The expectation was $22.46 billion).
Those cloud gains came largely from business AI solutions and the adoption of enterprise AI infrastructure, the company said, while also noting that its cloud contract backlog — that is, work it has yet to turn into revenue — had reached $514 billion.
The company’s profit reached $112.1 billion, a huge jump from this time last year, when the company reported a profit of $28.1 billion, the company’s earnings report showed. Meanwhile, Alphabet’s total revenue rose 24% year over year last quarter to $119.8 billion. The company also saw Google Services revenue grow 15% to $94.5 billion.
“Our investments in artificial intelligence are redefining what’s possible in every part of our business,” Google CEO Sundar Pichai said during Wednesday’s earnings call. “We have exciting momentum across the board.”
More people are also adopting Gemini, Google’s AI chatbot, as the app currently enjoys 950 million monthly active users, the company said. In Q4 2025, Google reported that the app had 750 million users.
It’s worth noting that revenue growth isn’t unusual for Google. This marks the company’s 12th consecutive quarter of double-digit revenue growth. But even by that standard, this quarter represents a particularly rich period for the tech giant.
Alphabet’s spending remains heavy, with its capex — the money it spends on building data centers, buying chips and expanding infrastructure — estimated to be between $180 billion and $190 billion for the year — a fact not lost on analysts during Wednesday’s earnings call. Several pressed Pichai on when and how much those investments will pay off.
“I think we’re calculating our capacity investments in ’27,” he said. “We are seeing strong demand indicators, including long-term deals,” he continued. “I think, if anything, the momentum looks healthier than we were about a year ago, so that’s what gives us the confidence to make these investments,” he said.
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