Google parent company Alphabet has reported blockbuster earnings, posting strong revenue growth driven by heavy investments in cloud computing and artificial intelligence.
The technology giant said revenue rose by 18 per cent year-on-year in the latest quarter, while its overall annual revenue surpassed $400 billion for the first time since the company was founded in 1998 by Larry Page and Sergey Brin.
Despite the strong performance, Alphabet disclosed plans to nearly double its investments as competition intensifies in Silicon Valley’s AI arms race. The company said it expects capital expenditure to range between $175 billion and $185 billion in 2026, almost double its 2025 spending, to meet growing customer demand for AI-powered products.
Chief Executive Officer Sundar Pichai said demand for Alphabet’s AI services continues to exceed supply, even as the company rapidly expands its infrastructure.
“We’ve been supply constrained even as we’ve been ramping up our capacity,” Pichai said during an earnings call.
Alphabet shares dipped slightly, falling just over one per cent in after-market trading following the announcement.
Google’s Gemini artificial intelligence platform continued its rapid growth, ending the year with 750 million monthly users, an increase of 100 million from the previous quarter. Analysts say this positions Google as a major contender in the global AI market.
“We expect Google to overtake OpenAI this year for the top spot in AI,” said Emarketer analyst Nate Elliott.
According to the earnings report, Alphabet generated $113.8 billion in revenue in the final quarter of 2025, supported by its core search business and expanding cloud services. The company recorded a quarterly profit of $34.5 billion.
Revenue from cloud computing surged by 48 per cent to $17.7 billion, reinforcing the division’s role as a key growth engine competing with Amazon Web Services and Microsoft Azure.
Google’s core search and advertising business remained its largest revenue driver, bringing in $82.3 billion, up from $72.5 billion in the same period a year earlier. YouTube advertising revenue also increased to $11.4 billion from $10.5 billion.
The steady flow of advertising income continues to give Alphabet a significant advantage in funding its AI infrastructure and long-term innovation. The company also revealed it now has more than 325 million paid subscriptions across consumer services such as Google One and YouTube Premium.
Alphabet said it continues to benefit from a US court ruling late last year that spared the company from selling off its Chrome browser amid monopoly concerns. However, Google has notified the court of its intention to appeal a separate ruling that found it held an illegal monopoly in online search.
Despite the overall growth, Alphabet’s experimental “Other Bets” division reported a loss of $3.6 billion on revenues of just $370 million. The division includes autonomous vehicle company Waymo.
Waymo announced this week that it raised $16 billion in a funding round that valued the company at $126 billion, with Alphabet remaining the majority investor. Waymo co-chief executives Tekedra Mawakana and Dmitri Dolgov described the investment as a milestone for autonomous mobility.
“This infusion of capital will ensure we are positioned to move forward with unprecedented velocity, while maintaining our industry-leading safety standards,” they said in a blog post.
Waymo also revealed that it more than tripled its annual ride volume last year to 15 million rides and now provides over 400,000 rides weekly across six major US metropolitan areas.
