Alphabet reported first-quarter revenue and profit above expectations, driven by strong performance in its cloud computing division.
The results offer early signs that its heavy investments in artificial intelligence infrastructure are beginning to yield results.
The parent company of Google said revenue excluding partner payouts reached $94.7 billion, surpassing analyst expectations of $91.6 billion.
Total revenue came in around $110 billion higher than the estimates of around $107 billion.
Net income rose to $62.6 billion, marking an 81% increase compared with the same period a year earlier.
The company also reported record annual sales of $403 billion in 2025, with full-year profits reaching approximately $132 billion.
The stock was up around 5% in extended trading on Wednesday after the results came out.
Cloud growth leads earnings beat
A key driver of the earnings outperformance was Google Cloud, which posted revenue of $20 billion, ahead of the $18.4 billion projected by analysts.
The cloud unit’s growth is closely watched by investors as a barometer of demand for AI infrastructure, particularly as companies ramp up spending on data centres and computing power to support advanced AI models.
Alphabet has been investing heavily in building out its infrastructure footprint, aiming to deploy large-scale data centres equipped with high-performance servers for both internal use and enterprise customers.
Within Alphabet’s broader business, advertising performance showed mixed results.
YouTube advertising revenue came in at $9.88 billion, slightly below estimates of $9.99 billion, while traffic acquisition costs were $15.22 billion, also just under expectations of $15.3 billion, according to StreetAccount data.
Despite these modest shortfalls, overall revenue strength was sufficient to offset weaker areas.
Growth remains strong
Alphabet said growth was driven by continued strength in Google Cloud Platform (GCP), particularly across enterprise AI solutions and infrastructure.
The company reported a Google Cloud backlog of $460 billion.
Chief executive Sundar Pichai said paid monthly active users for Gemini Enterprise increased 40% from the previous quarter.
Meanwhile, advertising revenue reached $77.25 billion, up 15% compared with the same period last year.
Alphabet has outperformed its “Magnificent Seven” peers this month, rising about 21%, as technology stocks broadly rallied.
The Nasdaq Composite is on track for its strongest monthly performance since April 2020, up roughly 14% as of Wednesday’s close.
Investor flows into the sector have remained strong despite concerns that higher oil prices and supply chain disruptions linked to the Iran conflict could increase costs for AI infrastructure.
The four hyperscalers — Alphabet, Amazon, Meta, and Microsoft — all reported earnings on Wednesday.
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