Alphabet reported strong quarterly earnings that helped ease investor concerns over its heavy AI spending, with Google Cloud revenue jumping 82% year-over-year to $24.8 billion, surpassing analyst expectations and accelerating from the previous quarter’s growth. The company attributed the surge largely to enterprise adoption of AI solutions and infrastructure, noting its cloud contract backlog climbed to $514 billion.
Alphabet’s overall profit reached $112.1 billion, a sharp increase from the same period last year, while total revenue grew 24% to $119.8 billion. Google Services revenue also rose 15% to $94.5 billion. CEO Sundar Pichai said the company’s AI investments are reshaping its business and pointed to broad momentum across its operations.
Adoption of Google’s AI chatbot Gemini also continued climbing, with monthly active users reaching 950 million, up from 750 million reported in the fourth quarter of last year. The results mark Alphabet’s twelfth consecutive quarter of double-digit revenue growth.
Despite the strong results, the company’s capital expenditures remain substantial, projected between $180 billion and $190 billion for the year. When questioned by analysts about returns on that spending, Pichai pointed to strong demand signals and long-term deals as reasons for confidence heading into 2027.
