{"id":22750,"date":"2026-04-30T08:27:23","date_gmt":"2026-04-30T08:27:23","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/22750\/"},"modified":"2026-04-30T08:27:23","modified_gmt":"2026-04-30T08:27:23","slug":"alphabets-stock-climbs-as-google-cloud-revenue-runs-rampant-growing-63","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/22750\/","title":{"rendered":"Alphabet’s stock climbs as Google Cloud revenue runs rampant, growing 63%"},"content":{"rendered":"

Google LLC\u2019s parent company Alphabet Inc.<\/a> delivered a stunning earnings beat as it reported its first-quarter financial results today, with sales also surpassing expectations thanks to rampant growth in its cloud infrastructure business.<\/p>\n

The company reported<\/a> earnings before certain costs such as stock compensation of $5.11 per share, almost double the $2.63-per-share analyst target. Revenue for the period rose 22% from a year earlier, to $109.9 billion, ahead of Wall Street\u2019s $107.2 billion target. Meanwhile, net income surged to $62.58 billion, up from $34.54 billion in the year-ago quarter.<\/p>\n

Chief Executive Sundar Pichai (pictured) told analysts on a conference call that the company\u2019s \u201centerprise AI solutions have become our primary growth driver for the cloud for the first time.\u201d He was referring to artificial intelligence offerings such as Gemini Enterprise, which saw paid monthly active users increase by 40% from the previous quarter.<\/p>\n

Google Cloud, which houses the company\u2019s AI products, posted sales of $20.2 billion in the quarter, up 63% from a year earlier and above the Street\u2019s $18.05 billion target. Growth there was led by strong AI and enterprise infrastructure sales, with the company pointed to a growing backlog of $460 billion.<\/p>\n

Alphabet said it\u2019s updating its guidance for capital expenditures in 2026 to between $180 billion and $190 billion, compared with an earlier estimate<\/a> of between $175 billion and $185 billion. Chief Executive Anat Ashkenazi also warned investors that the company expects its fiscal 2027 capex to \u201csignificantly increase\u201d from this year.<\/p>\n

During the previous quarter, the company\u2019s capex came to $35.7 billion, including money spent on real estate, data centers and the servers and other infrastructure that goes into them. Like its cloud computing peers Amazon Web Services Inc. and Microsoft Corp., Alphabet has been pouring billions of dollars into its AI infrastructure in an effort to capitalize on rising demand for the technology. \u201cWe are compute constrained in the near term,\u201d Pichai told analysts on the call. \u201cOur cloud revenue would have been higher if we were able to meet the demand.\u201d<\/p>\n

Some investors have become alarmed by the runaway spending of infrastructure providers amid the AI boom. But Alphabet has shown that its capex forecast is well within its spending power, thanks to the durability and quality of its revenue growth curve, said Investing.com analyst Thomas Monteiro.<\/p>\n

He told SiliconANGLE that the company has managed to reframe the debate around capex, making it less about cost inflation and margins, and more about who has the firepower on the revenue side to compete in the AI infrastructure market.\u00a0\u201cThe answer is that virtually no one can compete with Alphabet at the moment,\u201d\u00a0Monteiro said. \u201cWhile others continue to burn cash and escalate on the debt side, Alphabet continues to lead with healthy margins and further room to step on the gas if needed.\u201d<\/p>\n

What that means is that Alphabet is no longer asking investors to underwrite its AI spending based on faith alone, the analyst explained. He said it has demonstrated a closed loop between its infrastructure investments, product usage, enterprise demand and operating leverage. \u201cCombining all aspects of the business, from revenue growth to extremely healthy cash flows and unparalleled demand, Alphabet continues to project a faster and more diversified growth profile as the AI leader than almost any peer in the market,\u201d Monteiro said. \u201cIn a market where everyone needs more compute, Alphabet is proving it can afford the race while still expanding all sides of the business.\u201d<\/p>\n

Investors were clearly satisfied with the results, for Alphabet\u2019s stock gained more than 7% in after-hours trading, adding to momentum that has seen it rise 21% in the last month, outperforming its megacap peers. Money has been flowing into the stock despite concerns that rising oil prices caused by the war in Iran may result in increased AI infrastructure costs.<\/p>\n

Valoir analyst\u00a0Rebecca Wettemann told SiliconANGLE that investors are likely encouraged by Google\u2019s ecosystem and organic enterprise investments, with Gemini Enterprise now the main growth driver for Google Cloud and both customer acquisition and deal size growing impressively. \u201cWhile Microsoft is struggling with Copilot adoption momentum, Google and is seeing both use and token growth, partly thanks to deals with partners like Five9 that are beginning to pay off,\u201d she said.<\/p>\n

The analyst said one reason for Google\u2019s enterprise AI growth is its investment in governance and security, which help reassure enterprises that are concerned about AI \u201challucinations\u201d and other vulnerabilities. She also pointed to the company\u2019s success on the consumer side, noting that it\u2019s \u201cwinning in the living room and the boardroom,\u201d giving it more moats than its competitors.<\/p>\n

\u201cMost importantly, Google is becoming a better storyteller,\u201d Wettemann said. \u201cBeyond its technical capabilities, organizations invest with technology providers that they believe understand them and that they can trust to help them be successful.\u00a0Google has done a good job of making the pivot from technical prowess to how customers trust them across multiple sectors.\u201d<\/p>\n

Other areas of Alphabet\u2019s business did well, too. Google Search had a strong quarter, with AI experiences helping it to generate an all-time high number of queries and revenue growth of 19% compared with the previous year. That also helped boost Google\u2019s advertising revenue, which rose 15% from a year earlier, to $77.25 billion.<\/p>\n

There was disappointment for YouTube\u2019s ad business, however. YouTube ads, which are reported separately from Google ads, generated revenue of $9.88 billion during the quarter, coming in below the $9.99 billion consensus estimate. However, Chief Business Officer Philipp Schindler said the company is seeing more revenue from YouTube subscriptions, adding that they\u2019re now growing faster than YouTube ads.<\/p>\n

Alphabet\u2019s Other Bets unit, which encompasses the self-driving car business Waymo and other experimental businesses, recorded $411 million in sales, down from $450 million in the year-ago period. The numbers were likely affected by a decision to spin out Verily Life Sciences<\/a> during the quarter.<\/p>\n

As for Waymo, it had a busy quarter, raising $16 billion<\/a> in funding and surpassing 500,000 fully autonomous rides per week for the first time. The company also announced plans to expand to cities including Dallas, Houston, Orlando and San Antonio later this year.<\/p>\n

Photo: Alphabet<\/p>\n

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