Revenues exceeded Wall Street expectations in Alphabet’s quarterly report.
The Mountain View giant, which owns Google, recorded revenue of $110 billion in the first quarter of the year, of which $20 billion came from Google Cloud, up 63% compared to the same period last year. The market was enthusiastic: the stock rose 5% in after-hours trading, set to open Thursday at a record market capitalization of nearly $4.5 trillion.
“Alphabet’s excellent results in the cloud sector highlight how artificial intelligence is emerging as a decisive growth driver for Google, after years of lagging behind larger competitors, reassuring investors that its substantial investments are starting to pay off,” commented Reuters.
“Although investors had previously expressed skepticism about these large sums, they have generally welcomed the quarterly results, as demand for artificial intelligence and data centers has driven strong revenue and profit growth, led by a 63% increase in Google Cloud revenues,” observed the Financial Times.
All the details.
REVENUES ACCELERATE
In the first quarter of 2026, Alphabet’s consolidated revenues “increased by 22%, or 19% at constant currency, reaching $109.9 billion, demonstrating strong performance across all business sectors and marking our eleventh consecutive quarter of double-digit growth,” the company announced.
Looking at the division details, Google services revenues rose 16% to $89.6 billion, driven by 19% growth in ‘Google Search and others,’ 19% in subscriptions, platforms and Google devices, and 11% in YouTube advertising.
THE DRIVE FROM GOOGLE CLOUD
In particular, the Google Cloud division recorded significant growth acceleration, with revenues at $20 billion, up 63% year-over-year, well above the analysts’ average estimate of a 50.1% increase, according to data collected by Lseg.
PROFITS GROW
Net income jumped 81% to $62.6 billion and revenue grew 22% to $110 billion in the first quarter, surpassing estimates. As highlighted by the FT, “the profit was also supported by an unrealized gain of $36.9 billion on equity investments. The company did not detail the investments behind this increase, but holds significant stakes in SpaceX and Anthropic, valued respectively at about $125 billion and $38 billion, both considered potential candidates for a stock market listing during the year.”
THE PUSH ON AI CAPEX
At the same time, the search giant has again increased its spending plans for artificial intelligence infrastructure. Alphabet recorded capital expenditures of $35.7 billion in the quarter. This figure includes real estate, servers, data centers, and other infrastructure. The company also updated its capital expenditure forecast for 2026, raising it to a range between $180 billion and $190 billion, compared to the previous estimate of $175-185 billion.
Chief Financial Officer Anat Ashkenazi also stated that a “significant increase” in capital spending is expected for 2027 compared to 2026.
WORDS FROM THE CEO
“Our artificial intelligence solutions for businesses became, for the first time, our main growth driver for the cloud in the first quarter,” said CEO Sundar Pichai to analysts during the earnings conference call.
“In the short term, our computing capacity is limited,” Pichai explained during the earnings call, clarifying that “Our cloud revenues would have been higher if we had been able to meet demand.”
