Alphabet, the parent company of Google, released record-breaking earnings on Wednesday, with revenue rising as it makes significant investments in artificial intelligence-enhanced cloud computing services.
The internet behemoth reported that its quarterly revenue increased 18 percent year over year and that, for the first time, its total yearly revenue surpassed $400 billion. The company was formed in 1998 by Larry Page and Sergey Brin.
However, Alphabet announced that it will invest almost twice as much in the Silicon Valley technology arms race this year.
To match consumer demand for AI goods, the business anticipates capital expenditures of between $175 billion and $185 billion in 2026—double its 2025 spending.
Chief executive Sundar Pichai claims that despite Alphabet’s unrelenting investments in AI computing infrastructure, demand exceeds supply.
During an earnings call, Pichai stated, “Even though we’ve been increasing our capacity, we’ve been limited by supply.”
In after-market transactions, Alphabet’s stock fell by just over 1%.
Gemini gets fans: Google’s Gemini AI continued to expand rapidly, reaching 750 million monthly users by the end of the year, up 100 million from the previous quarter.
“This year, we anticipate Google to surpass OpenAI as the leading AI company,” stated Nate Elliott, an analyst at Emarketer.
According to earnings data, Alphabet generated $113.8 billion in revenue during the last three months of 2025, driven by its core search business and cloud computing.
In the most recent quarter, cloud computing sales increased 48% to $17.7 billion, and Alphabet reported a profit of $34.5 billion.
“Across the board, we’re seeing revenue and growth driven by our AI investments and infrastructure,” Pichai stated.
With $82.3 billion in revenue—up from $72.5 billion a year earlier—Google’s core search and advertising business continued to be the main source of income.
Additionally, YouTube’s advertising revenue increased significantly from $10.5 billion to $11.4 billion.
Alphabet has an advantage when it comes to investing in AI technology because of the money it makes from online advertising.
According to Google, it currently has over 325 million paid subscribers for its consumer services, which include YouTube Premium and Google One.
Alphabet’s cloud segment, which faces competition from Microsoft Azure and Amazon Web Services, has emerged as a major growth engine.
Alphabet is still benefiting from a US court decision from late last year that prevented the Internet behemoth from having to sell off its Chrome browser in order to resolve monopoly issues.
According to court documents, Google recently informed the court that it will appeal the federal judge’s decision that it had an unlawful monopoly on online search.
Alphabet’s experimental “Other Bets” segment, which includes the driverless vehicle company Waymo, reported a $3.6 billion loss on just $370 million in revenue despite the strong growth.
This week, Waymo, the well-known self-driving car company, said that it had raised $16 billion in a funding round, valuing the Alphabet subsidiary at $126 billion.
The majority investor in the investment round was Alphabet.
The significant investment was hailed by Waymo co-chief executives Tekedra Mawakana and Dmitri Dolgov as an indication that the era of widespread autonomous transportation has here.
In a blog post, Dolgov and Mawakana stated, “This infusion of capital will ensure we are positioned to move forward with unprecedented velocity, while maintaining our industry-leading safety standards.”
According to the business, Waymo more than tripled its yearly volume to 15 million rides last year and currently offers over 400,000 rides every week in the six main US cities where it operates.
