Alphabet investors have publicly worried that the company’s large investments in AI aren’t worth the investment. Reading the company’s latest financial results should give such investors some peace of mind.
Bottom line: Google’s cloud business is growing rapidly, driven primarily by the adoption of enterprise AI. The search giant has seen its Google Cloud revenue jump 82% from this time last year to $24.8 billion. This far exceeds last quarter’s strong year-over-year growth, when sales rose 63% to $20 billion, and easily exceeds what Wall Street analysts were expecting for this quarter’s growth, which was expected to be $22.46 billion.
The company said these cloud gains were primarily driven by the adoption of enterprise AI solutions and enterprise AI infrastructure, while also noting that its backlog of cloud contracts, or work that has not yet been converted to revenue, increased to $514 billion.
The company’s profit reached $112.1 billion, a significant increase from its $28.1 billion profit this time last year, according to its earnings report. Meanwhile, Alphabet’s overall revenue increased 24% year-over-year to $119.8 billion in the past quarter. The company also reported a 15% increase in revenue from Google services to $94.5 billion.
“Our AI investments are redefining what’s possible in every part of our business,” Google CEO Sundar Pichai said during an earnings call Wednesday. “We have exciting momentum across the board.”
More people are also adopting Gemini, Google’s AI chatbot, and the app now has 950 million monthly active users, the company said. In the fourth quarter of 2025, Google reported 750 million app users.
It’s worth noting that revenue spikes are nothing new for Google. This marks the company’s 12th consecutive quarter of double-digit revenue growth. But even by that standard, this quarter represented a particularly prolific period for the tech giant.
Alphabet remains a big spender, with capital expenditures (money spent on building data centers, buying chips and expanding infrastructure) estimated at $180 billion to $190 billion a year, a fact that analysts didn’t forget during Wednesday’s earnings call. Some asked Pichai when and how much impact these investments would have.
“I think our investment in computing power ended in 27 years,” he said. “We’re seeing strong demand indicators, including long-term contracts,” he continued. “If anything, I think the dynamics look healthier than they did about a year ago, so that gives us the confidence to take on these investments,” he said.
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