Alphabet reports earnings that beat expectations, GOOG rises 6% to a new high

Google’s parent company Alphabet released its first-quarter earnings report, and both its revenue and profit performance exceeded market expectations. The key highlight of this earnings report is the significant growth in its cloud computing segment, showing that the company’s massive investment in artificial intelligence (AI) infrastructure has started to produce tangible revenue conversion benefits. Alphabet continues to expand capital expenditures; driven by the strong earnings results, Alphabet stock (GOOG) rose nearly 7% after hours to $370, setting a new all-time high.

Alphabet’s revenue beat expectations, and cloud business growth was strong

According to Bloomberg data, Alphabet’s first-quarter revenue, excluding partner revenue sharing, was $94.7 billion, higher than analysts’ expectations of $91.6 billion. Earnings per share (EPS) was $5.11, significantly above Wall Street’s estimated $2.62, reflecting strong operating efficiency and pricing power. At the same time, the company announced a 5% increase in its dividend, with quarterly cash dividends of $0.22. These figures objectively show that, even amid the current overall economic environment, the company still maintains a solid financial structure and profit momentum.

Alphabet’s cloud computing division’s first-quarter sales reached $20 billion, exceeding expectations of $18.4 billion. This growth was mainly driven by strong demand for AI software and infrastructure. Notably, its “backlog” (the contract value that has been signed but not yet recognized as revenue) more than doubled from the prior quarter, surpassing $460 billion. To expand its market, the company will provide tensor processing units (TPUs) to specific customers to be deployed in their own data centers, which indicates strong enterprise demand for AI compute infrastructure.

Alphabet continues to expand capital expenditures

To maintain its technical advantage in the AI space, Alphabet expects this year’s “capital expenditures” (Capital Expenditure, meaning the funds a company invests to acquire or upgrade physical assets) to be raised from the previously estimated $175 billion to $185 billion, reaching twice the size of last year. Chief Financial Officer Anat Ashkenazi also said the company’s capital expenditures in 2027 are expected to be “substantially higher” than in 2026.

In terms of industry competition, the company is in a complex competitive relationship with OpenAI and Anthropic. Despite committing to invest up to $40 billion in Anthropic, internal efforts still face competitive pressure from AI code development products (such as Claude Code), highlighting the high-pressure environment in the AI industry for technical R&D.

Gemini paid-user growth, search engine query volume hits a new high

As AI technology is deeply integrated, Gemini Enterprise’s paid monthly active users grew by 40% from the previous quarter. Its search engine’s query volume also reached an all-time high. The company is currently providing AI-generated answers in many search results; this fundamental shift is reshaping the traditional keyword and search advertising business model. From a macroeconomic and digital marketing perspective, this trend will have a far-reaching impact on companies that rely heavily on Google traffic for profitability.

GOOG rose 6% after hours to $370, setting a new all-time high

In addition, Alphabet’s private investment value revaluation in unlisted companies such as SpaceX has also provided a positive contribution to its overall earnings.

Boosted by the strong earnings report, Alphabet stock (GOOG) rose nearly 7% after hours to $370, setting a new all-time high. Its performance this month has outpaced the other seven major tech giants, rising 26%.

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