Google Cloud revenue jumps 82% year-over-year to $24.8B as AI spending pays off

Alphabet reported record quarterly profits of $112.1B, a 299% increase from $28.1B in the same period last year, according to the company’s earnings release. Overall revenue grew 24% year-over-year to $119.8B, with Google Services revenue rising 15% to $94.5B.

Google Cloud revenue spiked 82% year-over-year to $24.8B, surpassing both the prior quarter’s 63% growth ($20B) and Wall Street’s expectation of $22.46B. The company attributed the gains to enterprise AI solutions and infrastructure adoption, which also contributed to a backlog of cloud contracting work totaling $514B.

Google CEO Sundar Pichai stated during the earnings call that the company’s AI investments are ‘redefining what’s possible across every part of our business,’ highlighting ‘exciting momentum’ across its operations. The remarks followed investor concerns about the payoff from Alphabet’s substantial AI spending, including capital expenditures estimated between $180B and $190B for the year.

Gemini, Google’s AI chatbot, reached 950M monthly active users, up from 750M reported in Q4 2025. The growth reflects broader adoption of Google’s AI tools, though the company did not disclose revenue directly tied to Gemini.

Analysts pressed Pichai on the timeline for returns on AI investments, to which he responded that compute capacity investments in 2027 are expected to align with ‘strong demand indicators, including long-term deals.’ He added that the ‘dynamics look healthier’ than a year ago, reinforcing confidence in ongoing spending.