Alphabet's Google Cloud revenue jumps 63% as AI demand pushes quarterly revenue past estimates

Alphabet's cloud unit beats quarterly revenue estimates on strong AI demand

April 29 (Reuters) - Alphabet (GOOGL.O), opens new tab topped Wall Street estimates for quarterly revenue growth at its cloud computing unit on Wednesday, driven by sustained enterprise spending on artificial-intelligence infrastructure. Shares of the company were up about 4% in extended trading. Alphabet's total revenue rose 22% to $109.9 billion in the first quarter, compared with an estimate of $107.2 billion, according to LSEG data. Revenue at Google Cloud grew 63% to $20 billion in the first quarter ended March, compared with analysts' average estimate of a 50.1% increase, according to data compiled by LSEG. The cloud unit's backlog nearly doubled quarter on quarter to over $460 billion, the company said. The third-largest cloud services provider globally, behind Amazon Web Services (AMZN.O), opens new tab and Microsoft's (MSFT.O), opens new tab Azure, has ⁠continued to land major deals, including expanded AI infrastructure partnerships with Meta (META.O), opens new tab and cybersecurity firm Palo Alto Networks (PANW.O), opens new tab. The results underscore Alphabet's position as a key beneficiary of a global surge in spending on artificial intelligence, even as investors remain watchful of whether massive outlays on infrastructure will translate into sustained growth and market share gains. Strong demand for cloud-based AI services continues to outstrip supply across the industry, pushing hyperscalers to accelerate investments in data centers, advanced chips and networking equipment. Alphabet, Microsoft, Amazon and Meta are expected to collectively spend well over $600 billion this year to expand AI capacity, as competition intensifies and companies race to secure computing power. Google Cloud's performance ⁠comes at a time when rivals have delivered mixed signals on growth, helping ease concerns about potential market share losses for Alphabet in the highly competitive cloud market. At the same time, capacity constraints remain a bottleneck across the sector, limiting providers' ability to fully capitalize on AI-driven demand despite aggressive spending plans. Alphabet has also gained traction in its in-house AI ⁠efforts. Its Gemini models, including newer iterations rolled out this year, have seen rising adoption across enterprise and consumer applications, strengthening the company's position in the AI race. A partnership to power Apple's (AAPL.O), opens new tab artificial intelligence features, including upgrades to Siri, is ⁠expected to significantly expand Google's reach across a vast global device base. Alphabet shares have outperformed most Big Tech peers over the past year, supported by growing signs that AI integration is lifting its core search and ⁠advertising businesses. AI-driven features such as AI Overviews and AI Mode continue to boost user engagement, while opening new avenues for monetization. The company has expanded ads within AI-generated responses across multiple markets and said monetization is broadly in line with traditional search. Reporting by Akash Sriram in Bengaluru; Editing by Tasim Zahid Our Standards: The Thomson Reuters Trust Principles., opens new tab

Alphabet increases AI spending but gets rewarded for further proof that it's paying off

Alphabet reported a monster quarter, with revenue more than $2.5 billlion ahead of expectations and earnings nearly doubling the Street estimate. Revenue in the first quarter increased 22% year-over-year to $109.9 billion, well ahead of the $107.2 billion expected, according to LSEG data. Earnings per share surged 82% to $5.11, well ahead of the LSEG-compiled consensus estimate of $2.63. GOOGL YTD mountain Alphabet YTD Shares of the Google parent company jumped more than 6.5% on the print in after-hours trading. As of Wednesday's nearly record-high close of around $350, the stock was already up nearly 12% year to date. Club names Meta Platforms , Amazon , and Microsoft also reported earnings after the bell. Bottom line Alphabet posted beats in search, subscriptions, and cloud -- its three most consequential segments -- that more than offset small misses in YouTube advertising, Networks, and Other Bets. That explains the top-line beat. One notable call out was a 48% increase in cloud revenue, which resulted in an over 200% increase in cloud operating income. As for the phenomenal EPS, the team kept costs under control and realized strong year-over-year margin expansion. The Street was expecting a marginal contraction for the key profit metric. Along with the other clear indicators that artificial intelligence investments are paying off (more on that in a bit), these results are helping investors stomach the massive levels of AI infrastructure spending, even as the team told investors to expect even higher levels in the year ahead. Regarding capital expenditures, Alphabet is now including investments relating to the acquisition of data center and energy infrastructure solutions provider Intersect, which was finalized in March. As a result, Alphabet now sees capex for full-year 2026 between $180 billion and $190 billion, a $5 billion increase at the midpoint, and well above the Street's estimate of just over $175 billion. "We are seeing unprecedented internal and external demand for AI compute resources," CFO Anat Ashkenazi said on the post-earnings conference call. "The investments we are making in AI [are] delivering strong growth, as evidenced by the record revenue and backlog growth in Google Cloud and strong performance in Google services. Looking ahead, these strong results reinforce our conviction to invest the capital required to continue to capture the AI opportunity. As a result, we expect our 2027 capex to significantly increase compared to 2026." This is a perfect example that while Wall Street may be on edge about spending, investors are willing to give management teams a pass, so long as they can consistently demonstrate that those investments are paying off. That's exactly what we're seeing with Alphabet's results, and we are, therefore, increasing our price target to $400 from $350. We are also reiterating our buy-equivalent 1 rating. We think Alphabet should be a staple in any portfolio, but would advise patience Thursday if the after-hours rally were to hold. For the Club, we may very well opt to book some profits around Thursday's open, given our position size and the arch of our purchases since re-initiating a position on Dec. 29, 2025. Shares are up about 30% since their Iran war lows in March. Why we own it Alphabet has gotten its mojo back. The latest Gemini artificial intelligence model wowed investors while drawing attention to Google's custom chips co-designed with Broadcom . Google has also been chosen as Apple 's partner for AI. Put all that together with search still dominating and cloud growth off the charts, Alphabet would be great in any portfolio. Competitors : Amazon , Microsoft , and Meta Platforms Weight in portfolio : 3.27% Most recent buy : April 6, 2026 Initiated : Dec. 29, 2025 Commentary AI experiences helped drive Search usage and queries to an all-time high. Google Cloud growth accelerated to 63% year over year, up from the 48% growth rate we saw in the fourth quarter of last year. Better yet, Google Cloud's backlog nearly doubled on a sequential basis, exiting the quarter at $460 billion. Adoption of the Gemini app resulted in a record quarter for Alphabet's consumer AI offerings. Gemini Enterprise saw paid monthly active users increase 40% sequentially. The number of $100 million to $1 billion deals also doubled versus the year-ago period. Companywide paid subscriptions exited the quarter at 350 million, thanks largely to YouTube and Google One. First-party LLMs, like Gemini, realized a 60% sequential increase in token-per-minute usage to 16 billion. In AI speak, a token is a unit of data. Alphabet's latest generation of tensor processing units (TPUs), co-designed by fellow Club name Broadcom, is delivering 80% better performance versus the prior generation. Waymo, Alphabet's self-driving vehicle initiative, is now doing over 500,000 fully autonomous rides per week. With six new cities launched since the start of the year, Waymo now operates in 11 major cities across the U.S. (Jim Cramer's Charitable Trust is long GOOGL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Google Gives OpenAI 20 Billion Reasons To Worry

On Wednesday, Google reported its highest revenue growth rate in a single quarter in roughly four years. The tech giant's revenue soared 20% in the first quarter of 2026 thanks in large part to the $20 billion in sales that the cloud computing unit in charge of its AI initiatives brought in. The news is particularly huge considering that only a day ago, the AI industry was rocked with a Wall Street Journal report claiming that OpenAI had missed its own revenue and user targets because ChatGPT growth had slowed toward the end of last year. The revenue growth miss was reportedly bad enough to have CFO Sarah Friar worried about whether the AI giant could pay for its computing contracts. The reason, according to the report, was that Google's Gemini had eaten into ChatGPT's market share. OpenAI is not a public company, so its financials are not made public and we can't truly compare numbers, but as the creator of ChatGPT, OpenAI has enjoyed a leading position in the industry since it began the AI hype cycle a couple of years ago. But that position has been questioned over the past few months, particularly following on the heels of Google's pretty well-received Gemini 3 release. Only a few weeks after Gemini 3 dazzled users, OpenAI declared a "code red" at the company. OpenAI has double the reason to be afraid of the Wednesday earnings report because it was Google's competitor offerings that really brought in the stellar revenue. "The largest contributor to Cloud's growth this quarter was AI solutions, driven by strong demand for industry-leading models, including Gemini 3," Google parent company Alphabet's CFO Anat Ashkenazi said in the company's earnings call. CEO Sundar Pichai also said Google's open models had been downloaded "over 500 million times." Google is shaping up to be a huge presence in the AI game, and a major competitor not just to AI tool providers like OpenAI and Anthropic, but also increasingly to infrastructure giant Nvidia. The company's TPU chips have been rising in popularity and finding big-name clients like Meta. In the call, Ashkenazi said that they were "seeing unprecedented internal and external demand for AI compute resources." Among its competitors, Google enjoys a rare positioning as a leading competitor in both tools and infrastructure, and it's the exact thing that executives are banking on for success. "The fact that we own frontier models [and] own the silicon really helps us stay ahead of the curve," Pichai said. That positioning also makes Google's cloud business a crucial indicator of the health of the AI boom. Investors have gambled unimaginable amounts of money on the fact that AI demand will play out as promised by the industry, and the recent OpenAI report has gotten people worried that might not be the case. Google's numbers might provide some solace, at least for now. As for what's next, company executives shared that the focus right now is on AI mode, Google's biggest bet in incorporating AI into the Search experience. Pichai also said that there is "a huge opportunity ahead" for agentic AI "in the context of Search." That premise of having an AI system browse the internet for you is something the company has been really banking on, to varying degrees of success. "Obviously, we are in very, very early innings of all that, but our investments in our full-stack AI approach, I think, put us in a good position to bring those experiences to Search," Pichai said. Company executives also said to expect news about Search at the upcoming Google I/O conference in mid-May, though they did not specify whether it would have something to do with AI. On the Gemini side of things, Google executives said their main focus is on the free offerings, and while there is no rush, ads are probably going to be introduced at one point to the chatbot. "Let's also be clear, ads have always been a big part of scaling products to reach billions of people, and if done well, ads can be really valuable and really helpful commercial information, and at the right moment, we'll share any plans," Google's chief business officer Philipp Schindler said in the call.

Google and Microsoft Just Proved the AI Trade Is Alive -- While OpenAI Is Sweating - Decrypt

OpenAI missed its own internal revenue and user targets in recent months, with CFO Sarah Friar reportedly warning the company may struggle to fund future compute contracts. Microsoft and Alphabet, Google's parent company, both reported earnings after the bell, and both crushed expectations -- on the same day OpenAI's revenue stumbles were still reverberating through the market. The message from the two biggest players in enterprise cloud was hard to miss: The AI trade isn't slowing down. If anything, it's accelerating. Alphabet posted $109.9 billion in Q1 2026 revenue, up 22% from a year ago and the company's fastest growth rate since 2022. Wall Street was expecting around $107.1 billion. The headline number is Google Cloud, which brought in $20.03 billion -- up 63% year-over-year from $12.26 billion in Q1 2025, and nearly $1.6 billion above analyst estimates. CEO Sundar Pichai said enterprise AI solutions had become "our primary growth driver for cloud for the first time in Q1." Microsoft wasn't far behind. The company reported $82.9 billion in revenue for its fiscal Q3 2026, up 18% year-over-year, beating the $81.39 billion estimates. The real number that turned heads: Its AI business surpassed an annual revenue run rate of $37 billion, up 123% from the prior year. Azure and other cloud services grew 40% year-over-year. Microsoft Cloud overall hit $54.5 billion, up 29%. All of this thanks to the magic of the AI boom. Copilot, Microsoft's AI assistant for enterprise, now exceeds 20 million paid users -- up from 15 million just last quarter. CEO Satya Nadella called it the "agentic computing era," which is the kind of phrase you say when your numbers back it up. Gemini is pulling its weight across the board. Earlier this year, Apple signed a multi-year deal to build its next generation of Foundation Models on Google's Gemini, handing the search giant one of the biggest AI endorsements of 2026. Paid monthly active users of Gemini Enterprise grew 40% quarter-over-quarter. Google's Cloud backlog hit $460 billion -- nearly double the prior quarter. All of this lands against the backdrop of OpenAI's bad week. The company missed its own internal targets for both revenue and user growth, with CFO Sarah Friar reportedly telling company leaders she was worried OpenAI might not be able to fund future compute contracts if revenue doesn't pick up fast enough. The market response was swift. CNBC reports that Oracle dropped around 4%, CoreWeave sank more than 5%, and SoftBank -- one of OpenAI's largest investors -- fell roughly 10% during Tokyo trading hours. Nvidia and AMD also slid. The contrast is hard to ignore. While OpenAI is leaning on investors to absorb the gap between ambition and revenue, Google and Microsoft are printing cash from the same AI wave. Gemini 3 Pro, released in November 2025, outpaced its predecessor on every benchmark Google tested, and is now driving commercial demand across the Cloud stack. On the advertising side, Google's total ad revenue came in at $77.25 billion, up 15.5% year-over-year, beating estimates in that field too. YouTube was the one soft spot at $9.88 billion versus the $9.99 billion forecast -- a minor miss in an otherwise clean sweep. Alphabet guided 2026 capital expenditures at $175 billion to $185 billion, up from $91.4 billion in 2025. The $460 billion Cloud backlog may suggest the company expects those bets to keep converting into revenue well into 2027.

Google stock price, Alphabet earnings, revenue and profit rise after AI drives quarterly results

Google stock price, Alphabet earnings, revenue and profit became a major topic after the latest quarterly report from Alphabet. The company reported strong growth supported by artificial intelligence, cloud demand, and enterprise partnerships. The earnings beat market estimates and pushed shares higher in extended trading. The report also highlighted rising global demand for AI infrastructure. Investors are watching how spending on data centers and chips will affect long-term growth. The results show how AI is shaping search, ads, cloud, and partnerships across the company. Google stock price, Alphabet earnings, revenue and profit remained in focus after Alphabet reported strong quarterly results driven by artificial intelligence and cloud demand. The company posted $62.6 billion profit and $109.9 billion revenue, beating expectations and showing growth across search, advertising, and cloud. Investors reacted positively as the results confirmed strong demand for AI services and continued enterprise spending on infrastructure. Google stock moved higher in extended trading after the earnings announcement. Shares rose about 4% as investors responded to stronger-than-expected revenue and cloud performance. Over the past year, the stock has gained support from rising AI adoption and improved engagement across search and advertising products, which has helped boost confidence in long-term growth. Alphabet earnings showed strong year-on-year growth, with revenue rising 22% and Google Cloud revenue increasing 63% to $20 billion. The cloud backlog crossed $460 billion, showing long-term enterprise demand. The results highlighted how AI integration across services is helping expand revenue streams while the company continues investing heavily in infrastructure and computing capacity. Google stock price, Alphabet earnings, revenue and profit started the quarter with strong numbers. Alphabet reported profit of $62.6 billion and revenue of $109.9 billion. This result beat expectations and exceeded the same quarter last year. Chief executive Sundar Pichai said AI investments are supporting all business areas. The company is using a full stack AI approach. This includes infrastructure, models, and applications. The results show that AI is now central to the company's strategy. AI features are being used across search, cloud, and advertising. The company also confirmed that monetization of AI features is similar to traditional search ads. The cloud business delivered strong growth during the quarter. Revenue at Google Cloud rose 63% to $20 billion. Analysts expected a 50.1% increase. This shows strong enterprise demand for AI infrastructure. The cloud backlog nearly doubled to more than $460 billion. This backlog represents future revenue from signed contracts. It signals long-term demand from businesses investing in AI services. Alphabet is the third-largest cloud provider. It follows Amazon Web Services and Microsoft Azure. The company continues to compete for enterprise contracts and global cloud market share. Alphabet signed and expanded partnerships with major companies. These include deals with Meta and Palo Alto Networks. These partnerships focus on AI infrastructure and cybersecurity solutions. The company also expects growth from a partnership with Apple. Google will help power AI features on Apple devices. This includes updates to Siri. This partnership could expand Google AI across a global device base. These deals show how AI partnerships are becoming key to competition in the tech sector. Tech companies are spending heavily to expand AI capacity. Alphabet, Microsoft, Amazon, and Meta are expected to spend more than $600 billion this year. Spending will go toward data centers, chips, and networking. Demand for cloud-based AI services continues to exceed supply. This has created capacity constraints across the industry. Providers are racing to build more infrastructure. Investors are watching whether these investments will lead to long-term growth. There are concerns about the cost of expansion. However, strong demand signals long-term opportunity. Alphabet said AI features are increasing engagement across search and advertising. Features like AI Overviews and AI Mode are driving user activity. The company has started placing ads within AI responses. These ads are rolling out in multiple markets. Alphabet said monetization is in line with traditional search ads. This suggests that AI is not replacing search revenue. Instead, AI is creating new revenue opportunities. After the earnings report, shares rose about 4% in extended trading. Investors reacted positively to revenue growth and cloud performance. Alphabet stock has outperformed many large tech companies over the past year. The company has benefited from the global AI spending surge. Investors are still watching risks. These include infrastructure costs, competition, and supply limits. However, the results confirm Alphabet's strong position in the AI race. Alphabet expects AI adoption to continue growing. Its Gemini AI models are seeing wider use in enterprise and consumer apps. These models are helping the company compete in the AI market. Capacity constraints remain a challenge. The industry must expand infrastructure to meet demand. Companies are racing to secure computing power and chips. The latest results show that Alphabet is a major beneficiary of global AI investment. The company is focusing on long-term growth through AI integration across products and services. Q1. How did Google stock react to Alphabet earnings? Google stock moved higher after the earnings report. Shares rose about 4% in extended trading as investors reacted to strong revenue growth, cloud performance, and rising demand for AI services worldwide. Q2. Why is Alphabet investing heavily in AI infrastructure? Alphabet is expanding data centers and chips to meet strong demand for cloud AI services. Demand exceeds supply across the industry, and companies are racing to secure computing power and long-term growth opportunities.

Alphabet CEO Sundar Pichai Says Google's Custom Chips, Gemini Models And Cloud Stack Give It Unique AI Ed

Google's Full-Stack AI Strategy Powers Competitive Advantage During the first-quarter earnings call, Pichai spoke about the tech giant's control across the AI ecosystem -- including custom chips, Gemini models, cloud infrastructure, developer tools and security. "We are genuinely differentiated," Pichai said during the company's first-quarter earnings call, describing Google's "vertically optimized AI stack" as a key factor helping it stay ahead in a rapidly intensifying AI race. Pichai added that Google's control over both silicon and software allows it to scale AI efficiently while protecting margins and maintaining security. AI Demand Surges As Google Faces Capacity Constraints Despite strong momentum, Pichai acknowledged that Google is currently struggling to keep pace with soaring AI demand. "We are compute constrained in the near term," he said, noting that Google Cloud revenue could have been even higher if sufficient infrastructure had been available. The company reported an 800% year-over-year increase in enterprise AI solutions, fueled by rising demand for Gemini-powered services, cloud infrastructure and TPU hardware. Internal AI Development Takes Priority During the call, Pichai said Alphabet prioritizes compute resources first toward internal research and development, particularly training frontier AI models such as Gemini, before allocating additional capacity across products like Search, YouTube and enterprise cloud offerings. He said that long-term infrastructure investments are being guided by "tangible demand signals" and a disciplined return-on-investment framework. Alphabet Q1 Earnings Crush Wall Street Alphabet posted first-quarter earnings of $5.11 per share, crushing analyst expectations of $2.62 by more than 95%. Revenue rose to $109.9 billion, topping Wall Street estimates of $106.93 billion and increasing from $90.23 billion a year earlier. Price Action: Alphabet Class A shares rose 7.24% in after-hours trading to $375.29, while Class C gained 7.05% to $371.80, according to Benzinga Pro. According to Benzinga Edge, GOOGL scores in the 95th percentile for Quality, highlighting robust performance across short, medium and long-term metrics. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Rokas Tenys / Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Google parent Alphabet's cloud unit beats quarterly revenue estimates on strong AI demand

Alphabet topped Wall Street estimates for quarterly revenue growth at its cloud computing unit on Wednesday, driven by sustained enterprise spending on artificial-intelligence infrastructure. Shares of the company were up about 4% in extended trading. Alphabet's total revenue rose 22% to $109.9 billion in the first quarter, compared with an estimate of $107.2 billion, according to LSEG data. Revenue at Google Cloud grew 63% to $20 billion in the first quarter ended March, compared with analysts' average estimate ⁠of a ⁠50.1% increase, according to data compiled by LSEG. The cloud unit's backlog nearly doubled quarter on quarter to over $460 billion, the company said. The third-largest cloud services provider globally, behind Amazon Web Services and Microsoft's Azure, has continued to land major deals, including expanded AI infrastructure partnerships with Meta and cybersecurity firm Palo Alto Networks. The results underscore Alphabet's position as a key beneficiary of a global surge in spending on artificial intelligence, even as investors remain watchful of whether massive outlays ⁠on infrastructure will translate into sustained growth and market share gains. Strong demand for cloud-based AI services continues to outstrip supply across the industry, pushing hyperscalers to accelerate investments in ⁠data centers, advanced chips and networking equipment. Alphabet, Microsoft, Amazon and Meta are expected to collectively spend well over $600 billion this year to expand AI capacity, as competition intensifies and companies race to secure computing power. Google Cloud's performance comes at a time when rivals have delivered mixed signals on growth, helping ease concerns about potential market share losses for Alphabet in the highly competitive cloud market. At the same time, capacity constraints remain a bottleneck across the sector, limiting providers' ability to fully capitalize on AI-driven demand despite aggressive spending plans. Alphabet has also gained traction in its in-house AI efforts. Its Gemini models, including newer iterations rolled out this year, have seen rising adoption across enterprise and consumer applications, strengthening ⁠the company's position in the AI race. A partnership to power Apple's artificial intelligence features, including upgrades to Siri, is expected to significantly expand Google's reach across a vast global device base. Alphabet shares have outperformed most Big Tech peers over the past year, supported by growing signs that AI integration is lifting its core search and advertising businesses. AI-driven features such as AI Overviews and AI Mode continue to boost user engagement, while opening new avenues for monetization. The company has expanded ads within AI-generated responses across multiple markets and said monetization is broadly in line with traditional search.