Google's AI Bets Pay Off: Cloud Revenue Surges

Alphabet (owner of the Google brand) has effectively addressed investor concerns regarding the massive spending on AI technology. The company's latest financial report shows that the Google Cloud business is seeing unprecedented growth following the widespread adoption of AI solutions by corporate clients. This indicates that the company's investments in expensive chips and data centers are beginning to pay off, reports Techcrunch.com reports .

Google Cloud revenue grew by 82% year-over-year to $24.8 billion. This figure not only surpassed the 63% growth in the previous quarter but also significantly exceeded Wall Street analysts' forecasts of $22.46 billion. Alphabet's leadership attributes this success to the rising demand for corporate AI infrastructure.

Financial performance and record profits

The company's overall financial health has also improved remarkably. Alphabet's total revenue grew by 24% year-over-year to $119.8 billion. Most notably, net income rose from $28.1 billion last year to $112.1 billion. Although Google continues to increase spending, such revenue growth is helping to reassure investors.

Google CEO Sundar Pichai emphasized during the quarterly earnings call that AI is reshaping all areas of the company's business. According to him, the Google Services division also generated $94.5 billion in revenue, a 15% increase. This demonstrates that the traditional search and advertising business remains stable due to AI integration.

Gemini user count and future plans

The company's AI chatbot, Gemini, continues to gain popularity. Currently, the number of monthly active users for the application has reached 950 million. For comparison, in the fourth quarter of 2025, this figure was 750 million. Such rapid expansion of the user base indicates that AI technology is taking a central position in the Google ecosystem.

Nevertheless, Alphabet has no intention of cutting costs. The company's capital expenditures for building data centers, purchasing chips, and expanding infrastructure are expected to be around $180-190 billion by the end of the current year. Sundar Pichai responded confidently to analysts' questions about when these investments will fully pay off.

Pichai noted that investments in computing power will reach their peak efficiency by 2027. "We are seeing long-term contracts and strong demand. The current dynamic looks much healthier than it did a year ago, which gives us confidence to continue investing," he added. The backlog of Google Cloud services has reached $514 billion, which serves as a source of stable future revenue.