Hajra Naz
Alphabet investors have openly questioned the company’s massive AI spending. Many wondered if those investments were worth it. The latest earnings report may help ease those concerns.
The biggest takeaway is Google’s cloud business. It is growing fast. Much of that growth comes from enterprise AI adoption.
Google Cloud revenue reached $24.8 billion. That is up 82% from the same period last year. It is also much higher than the previous quarter. Back then, cloud revenue grew 63% to $20 billion. The latest figure also beat Wall Street’s estimate of $22.46 billion.
Google said enterprise AI products drove much of the growth. Businesses are also spending more on its AI infrastructure. The company added that its cloud backlog has reached $514 billion. That includes signed contracts that have not yet turned into revenue.
Alphabet also reported a huge jump in profit. Net income climbed to $112.1 billion. A year earlier, it stood at $28.1 billion.
Overall revenue also increased. It grew 24% year over year to $119.8 billion. Google Services performed well too. Revenue from that division rose 15% to $94.5 billion.
“Our AI investments are redefining what’s possible across every part of our business,” Google CEO Sundar Pichai said during Wednesday’s earnings call. “We have exciting momentum across the board.”
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Gemini continues to attract more users. Google said the AI chatbot now has 950 million monthly active users. In the fourth quarter of 2025, the app had 750 million users.
Strong revenue growth is nothing new for Google. This marks its 12th straight quarter of double-digit revenue growth. Even so, this quarter stands out. The company’s cloud business delivered especially strong results.
Google has announced that it will allocate between 180 billion and 190 billion US dollars in capital expenditures to the artificial intelligence (AI) field this year, with funds directed to data centers, AI chips, and related infrastructure. During the company’s earnings call, analysts questioned when this large-scale investment would generate
stronger returns. Google’s Sundar Pichai stated that growing market demand, rising long-term client orders, and a healthier overall market environment leave the company fully confident in its business prospects, and it will continue to increase its AI-related investments.
