Google parent Alphabet posts record earnings as annual revenue crosses $400 billion for the first time, driven by search and cloud growth, while sharply ramping up spending to stay ahead in the intensifying AI race
Alphabet, the parent company of Google, delivered blockbuster results on Wednesday, reporting a sharp rise in revenue as it continues to pour money into cloud computing and artificial intelligence, even as competition in Silicon Valley intensifies.
The technology giant said quarterly revenue climbed 18 percent from a year earlier, pushing its full-year revenue beyond the $400 billion mark for the first time since the company was founded in 1998 by Larry Page and Sergey Brin.
While celebrating the milestone,
Alphabet said that its spending spree is far from over. The company added that it expects capital expenditure to almost double this year as it races to expand AI infrastructure and meet soaring customer demand.
Our Q4/FY’25 results are in. Thanks to our partners & employees, it was a tremendous quarter, exceeding $400B in annual revenue for the first time. Our full AI stack is fueling our progress, and Gemini 3 adoption has been faster than any other model in our history.
We’re really… pic.twitter.com/UbcQPFRGkr
— Sundar Pichai (@sundarpichai) February 4, 2026
Alphabet forecasts capital spending of between $175 billion and $185 billion in 2026, roughly twice what it spent in 2025, as the global scramble for AI capacity gathers pace.
Chief executive Sundar Pichai acknowledged that even with aggressive investments, demand remains well ahead of what the company can currently deliver. “We’ve been supply constrained even as we’ve been ramping up our capacity,” he said during an earnings call.
Despite the strong numbers, Alphabet’s shares slipped just over one percent in after-hours trading.
Gemini builds buzz
Google’s Gemini artificial intelligence platform continued to gain traction, ending the year with 750 million monthly users, up by 100 million from the previous quarter.
“We expect Google to overtake OpenAI this year for the top spot in AI,” said Emarketer analyst Nate Elliott, as quoted by AFP.
Alphabet generated $113.8 billion in revenue in the final quarter of 2025, driven largely by its core search business and rapidly expanding cloud division. Quarterly profit came in at $34.5 billion.
Cloud revenue jumped 48 percent to $17.7 billion, underscoring its growing importance as Alphabet competes with Amazon Web Services and Microsoft Azure.
“We’re seeing our AI investments and infrastructure drive revenue and growth across the board,” Pichai said.
Search and advertising remained Alphabet’s biggest money-spinner, bringing in $82.3 billion, up from $72.5 billion a year earlier. YouTube advertising revenue also rose to $11.4 billion from $10.5 billion.
Alphabet said it now has more than 325 million paid subscriptions across consumer offerings such as Google One and YouTube Premium, providing a steady revenue base to fund its AI ambitions.
Alphabet continues to benefit from a US court decision late last year that allowed it to retain control of its Chrome browser despite antitrust concerns. The company has since said it will appeal a separate ruling that found it held an illegal monopoly in online search.
Beyond its core businesses, Alphabet’s experimental “Other Bets” unit remained a drag, posting a $3.6 billion loss on revenue of $370 million. That division includes Waymo, Alphabet’s autonomous driving arm.
Waymo this week said it raised $16 billion in funding at a valuation of $126 billion, with Alphabet as the majority investor. The company said the investment would accelerate the rollout of self-driving services, which now deliver more than 400,000 rides a week across six major US cities.
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