Google's parent company Alphabet reported first-quarter earnings after the bell on Wednesday, and the headline numbers were good — really good. Revenue came in at $109.9 billion, beating analyst estimates of $107.2 billion, according to LSEG. Earnings per share hit $5.11, and net profit surged 81% to $62.57 billion.
The real star was Google Cloud, which pulled in $20.02 billion — well above the $18.05 billion analysts expected. That's a 63% year-over-year jump, and for the first time, enterprise AI solutions were the primary growth driver. "Our enterprise AI solutions became the main growth engine for our cloud business in Q1," CEO Sundar Pichai told analysts on the call.
But not everything sparkled. YouTube ad revenue missed the mark, coming in at $9.88 billion against estimates of $9.99 billion. Chief Business Officer Philipp Schindler noted that YouTube subscriptions are now growing faster than ad revenue.
Alphabet's capital spending hit $35.7 billion this quarter, and the company raised its 2026 CapEx range to $180-$190 billion. CFO Anat Ashkenazi warned that 2027 CapEx would be "significantly higher." The company is going all-in on AI infrastructure, even as Pichai admitted that "in the short term, our compute capacity will be constrained. If we could meet demand, our cloud revenue would have been higher."
This is on top of Google's recent $10 billion investment in Anthropic, with up to $40 billion total committed. The hyperscale AI race is only heating up.
Alphabet's stock is up 21% this month, outperforming the rest of the Magnificent Seven. The broader tech rally — the Nasdaq has gained 14% in April — has been fueled by massive Wall Street interest in AI infrastructure, despite concerns over supply chain disruptions from the US military operations in Iran that began in late February.
Google's core search business also had a strong quarter, with revenue up 19% and query volumes hitting record highs, driven by AI-powered experiences. Total ad revenue was $77.25 billion, up 15.5% year over year.
Waymo, Alphabet's autonomous driving unit, generated $411 million in other investments, slightly below last year's $450 million. But the company said it now handles over 500,000 fully autonomous rides per week. In February, Waymo raised $16 billion in external funding at a $126 billion valuation, and it's preparing to launch in Dallas, Houston, San Antonio, and Orlando. This quarter it started autonomous operations in Nashville ahead of a commercial rollout with Lyft.
The company also noted that Google Cloud's backlog hit $460 billion, signaling strong demand ahead. Pichai said Gemini Enterprise paid monthly active users grew 40% quarter over quarter.
Alphabet has also been named one of TIME's 10 most influential AI companies for 2026, alongside OpenAI, Meta, and three Chinese firms. The AI arms race shows no signs of slowing down.