April 29 (Reuters) – Alphabet topped Wall Street estimates for quarterly revenue and profit on Wednesday, as enterprise spending on artificial intelligence delivered the best quarter of growth for its cloud unit since the start of the AI boom.<\/p>\n
Shares of the company were up \u200cabout 4% in extended trading.<\/p>\n
The Google parent company’s total revenue rose 22% to $109.9 billion in the first quarter, compared with an estimate of $107.2 \u200cbillion, according to LSEG data.<\/p>\n
Operating income for the cloud unit tripled to $6.6 billion in the first quarter from $2.2 billion a year earlier.<\/p>\n
Revenue at Google Cloud grew 63% to $20 billion in the \u200bfirst quarter ended March, well above analysts’ average estimate of a 50.1% increase, according to data compiled by LSEG. That growth rate is the best since the company began breaking out the segment’s revenue in 2020, according to LSEG data.<\/p>\n
In its earnings release, the search giant said that growth was led by increased spending on enterprise AI products and infrastructure. At the same time, its Gemini chatbot drove the “strongest quarter ever” for consumer AI, CEO Sundar Pichai said.<\/p>\n
“2026 is off to a \u200cterrific start. Our AI investments and full stack approach \u2060are lighting up every part of the business,” Pichai said, referring to every layer of the AI technology chain including chips, data centers, AI models and developer tools.<\/p>\n
The cloud unit’s backlog nearly doubled quarter on quarter to over $460 billion, the \u2060company said.<\/p>\n
The company said it had 350 million paid subscriptions across YouTube, its cloud storage and advanced AI service Google One and other products.<\/p>\n
SURGE IN SPENDING ON AI<\/p>\n
The third-largest cloud services provider globally, behind Amazon Web Services and Microsoft’s Azure, Alphabet has continued to land major deals, including expanded AI infrastructure partnerships with Meta and cybersecurity firm \u200bPalo \u200bAlto Networks.<\/p>\n
The results underscore Alphabet’s position as a key beneficiary of global spending on AI, \u200beven as investors worry whether massive outlays on infrastructure will \u200ctranslate into sustained growth and market share gains.<\/p>\n
Strong demand for cloud-based AI services continues to outstrip supply across the industry, pushing hyperscalers to accelerate investments in data centers, advanced chips and networking equipment.<\/p>\n
Alphabet’s capital spending more than doubled from a year earlier to $35.67 billion, but came in slightly under estimates of $36.06 billion.<\/p>\n
The company said last quarter that it planned to spend between $175 billion and $185 billion in capex this year.<\/p>\n
Alphabet, Microsoft, Amazon and Meta are expected to collectively spend well over $600 billion this year to expand AI capacity, as competition intensifies and companies race to secure computing power.<\/p>\n
Google Cloud’s performance comes at a time when \u200crivals have delivered mixed signals on growth, helping ease concerns about potential market share \u200blosses for Alphabet in the highly competitive cloud market.<\/p>\n
At the same time, capacity constraints remain a \u200bbottleneck across the sector, limiting providers’ ability to fully capitalize on \u200bAI-driven demand despite aggressive spending plans.<\/p>\n
Alphabet has also gained traction in its in-house AI efforts. Its Gemini models, including newer \u200citerations rolled out this year, have seen rising adoption across enterprise \u200band consumer applications, strengthening the company’s position \u200bin the AI race.<\/p>\n
A partnership to power Apple’s artificial intelligence features, including upgrades to Siri, is expected to significantly expand Google’s reach across a vast global device base.<\/p>\n
Alphabet shares have outperformed most Big Tech peers over the past year, supported by growing signs that AI integration is \u200blifting its core search and advertising businesses.<\/p>\n
AI-driven features such \u200cas AI Overviews and AI Mode continue to boost user engagement, while opening new avenues for monetization. The company has expanded \u200bads within AI-generated responses across multiple markets and said monetization is broadly in line with traditional search.<\/p>\n
(Reporting by Akash Sriram in Bengaluru \u200band Kenrick Cai in San Francisco; Editing by Tasim Zahid and Deepa Babington)<\/p>\n","protected":false},"excerpt":{"rendered":"April 29 (Reuters) – Alphabet topped Wall Street estimates for quarterly revenue and profit on Wednesday, as enterprise…\n","protected":false},"author":2,"featured_media":403843,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[365,1796,363,364,8187,20207,8558,367,13070,91575,111,139,69,114587,5172,145],"class_list":["post-403842","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alphabet","tag-artificial-intelligence","tag-artificialintelligence","tag-cloud-services","tag-cloud-storage","tag-data-centers","tag-google","tag-google-cloud","tag-lseg","tag-new-zealand","tag-newzealand","tag-nz","tag-quarterly-revenue","tag-sundar-pichai","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/403842","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=403842"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/403842\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/403843"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=403842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=403842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=403842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}