Alphabet has eased investor concerns over its heavy AI investments after reporting another strong quarter, fueled by rapid growth in its cloud computing business.
Google Cloud generated $24.8 billion in revenue, an 82% increase compared to the same period last year. The result exceeded both the previous quarter’s 63% annual growth and Wall Street’s expectation of $22.46 billion.
The company attributed much of this growth to rising demand for enterprise AI solutions and AI infrastructure, as businesses continue adopting Google’s cloud services. Alphabet also revealed that its cloud contract backlog has expanded to $514 billion, signaling strong future demand.
Overall, Alphabet reported $119.8 billion in quarterly revenue, up 24% year over year, while Google Services revenue climbed 15% to $94.5 billion. Net profit reached $112.1 billion, a significant increase from $28.1 billion during the same period last year.
CEO Sundar Pichai said the company’s investments in artificial intelligence are delivering results across its products and services.
“Our AI investments are redefining what’s possible across every part of our business. We have exciting momentum across the board.”
Google also announced continued growth for Gemini, its AI assistant, which now has 950 million monthly active users, up from 750 million reported in the fourth quarter of 2025.
While Alphabet continues to spend aggressively on AI, investors remain focused on whether those investments will generate long-term returns. The company expects to invest between $180 billion and $190 billion this year on data centers, AI chips, and infrastructure.
Addressing analyst questions about the scale of spending, Pichai said Google is confident in its strategy, pointing to strong customer demand and long-term enterprise contracts.
He noted that demand trends are stronger than they were a year ago, giving the company confidence to continue expanding its computing capacity and AI infrastructure.
The latest earnings mark Alphabet’s 12th consecutive quarter of double-digit revenue growth, reinforcing the company’s position as one of the biggest beneficiaries of the global AI boom.
