The question of whether Alphabet’s colossal AI spending would ever pay off got a forceful answer in the company’s latest earnings report—and it’s a resounding yes. Google Cloud revenue surged 82% year-over-year to $24.8 billion, a number that didn’t just beat last quarter’s already-impressive 63% growth, but also crushed Wall Street’s expectations of $22.46 billion. This isn’t just a good quarter. It’s a statement.
The engine behind the explosion is enterprise AI, with the company pointing to massive adoption of its AI solutions and infrastructure. The backlog of cloud work not yet booked as revenue climbed to a staggering $514 billion, suggesting the pipeline is not just full—it’s overloaded. Overall Alphabet revenue grew 24% to $119.8 billion, while profit made a dizzying leap to $112.1 billion, up from $28.1 billion a year ago. That’s the kind of number that turns skeptical investors into true believers.
CEO Sundar Pichai leaned into the narrative on Wednesday’s earnings call. “Our AI investments are redefining what’s possible across every part of our business,” he said. “We have exciting momentum across the board.” The consumer side is showing heat too. Gemini, Google’s AI chatbot, hit 950 million monthly active users, a jump of 200 million from the 750 million reported in Q4 2025. Twelve consecutive quarters of double-digit revenue growth is a hell of a streak, but this quarter stands apart.
Of course, the spending that sparked investor anxiety isn’t going anywhere. Alphabet’s capital expenditures for the year are projected at a jaw-dropping $180 billion to $190 billion. Analysts didn’t let that slide, pressing Pichai on when the payoff arrives. His response was to point to 2027, noting that demand indicators and long-term deals look “healthier than where we were about a year ago.” He’s asking for patience, but with a $514 billion backlog, he’s earned a little.
