Google Cloud revenue jumped 82% year-over-year to $24.8 billion last quarter, blowing past the $22.46 billion Wall Street analysts had penciled in and giving Alphabet a concrete answer to shareholders who have spent the past year questioning its AI spending. The company is guiding to $180 billion to $190 billion in capital expenditures for the year — mostly data centers, chips, and infrastructure — a number that had rattled investors until this print landed.
The cloud growth rate accelerated sharply from the prior quarter's 63%, when the division booked $20 billion. Alphabet said enterprise AI adoption drove the gains, both on the infrastructure side (customers renting compute) and the solutions side (customers buying prebuilt AI products). The company's backlog of contracted but unrecognized cloud work reached $514 billion, a figure that functions as forward visibility on how long the current growth arc can run.
Overall Alphabet revenue grew 24% year-over-year to $119.8 billion, with Google Services — the ads-and-search core — up 15% to $94.5 billion. Profit came in at $112.1 billion, nearly four times the $28.1 billion the company reported in the same quarter last year. This is Alphabet's 12th consecutive quarter of double-digit revenue growth, but the magnitude of the profit jump stands out even against that streak.
Key facts
- 01Google Cloud revenue grew 82% year-over-year to $24.8B, up from 63% growth and $20B the prior quarter.
- 02Alphabet's cloud contract backlog reached $514B, work booked but not yet converted to revenue.
- 03Quarterly profit hit $112.1B, nearly 4x the $28.1B Alphabet reported in the same quarter a year earlier.
- 04Gemini monthly active users climbed to 950M, up from 750M in Q4 2025.
- 05Alphabet expects 2026 capital expenditures of $180B to $190B on data centers, chips, and infrastructure.
Gemini monthly active users reached 950 million, up from 750 million in Q4 2025 — roughly 200 million net additions in two quarters. That growth matters for two reasons: it narrows the consumer usage gap with ChatGPT, and it feeds a data flywheel that Google can route back into model training and ad targeting.
The context here is a year of open investor anxiety. Alphabet, along with Microsoft, Meta, and Amazon, has spent 2026 defending a capital cycle that dwarfs anything the hyperscalers have run before. The core question — do the cloud bookings show up fast enough to justify the depreciation schedule on all these GPUs — had no clean answer until this quarter. An 82% growth rate against a $22.5 billion expectation is that answer, at least for now.
Analysts on Wednesday's earnings call pressed Sundar Pichai on when the capex bill starts producing free cash flow and how far out the compute commitments extend. Pichai pointed to 2027 as the year the current buildout meaningfully turns into capacity, and framed the long-term customer contracts inside the $514 billion backlog as the underwriting for further spend.
The comparison to a year ago is worth pausing on. In mid-2025, Alphabet was defending capex on the promise of AI demand that hadn't yet fully materialized in the cloud line. Twelve months later, cloud growth has accelerated by roughly 20 percentage points, backlog has ballooned, and Gemini adoption has climbed 27% in two quarters. The demand side of the ledger caught up with the spending side faster than skeptics expected.
Not everything is settled. Capital expenditures of $180 billion to $190 billion still represent a level of infrastructure spend that assumes cloud growth continues near current rates through 2027 and beyond. If enterprise AI adoption slows or if a competitor — Microsoft's Azure, Amazon Web Services, or a specialized provider like CoreWeave — starts winning a disproportionate share of new workloads, the depreciation math tightens quickly. The $514 billion backlog is a forward number, not cash in the door.
Google's quarter reframes the hyperscaler capex debate. The question was whether AI infrastructure spending could be justified by the revenue it generates; the answer, in Alphabet's case this quarter, is yes and by a wide margin. That gives Pichai political room to keep building through 2027, and it puts pressure on Microsoft and Amazon to show similar cloud acceleration in their next prints. The companies that can convert AI capex into cloud revenue at Google's current clip will define the next phase of the market; the ones that can't will spend the back half of 2026 explaining why.
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