Alphabet has reported booming cloud revenue driven by enterprise adoption of AI, easing investor concerns that the company's enormous AI spending was not paying off. Google Cloud revenue jumped 82% year-on-year to $24.8 billion, comfortably beating both last quarter's growth rate and Wall Street's expectations, while the company's overall profit and revenue also surged.

Alphabet's quarterly profit reached $112.1 billion, up sharply from $28.1 billion a year earlier, with total revenue up 24% to $119.8 billion and Google Services revenue rising 15% to $94.5 billion. The company's cloud contract backlog climbed to $514 billion, and its Gemini chatbot now has 950 million monthly active users, up from 750 million in the fourth quarter of 2025. Despite capital expenditure expected to reach $180-190 billion this year, CEO Sundar Pichai told analysts that strong demand and long-term deals gave the company confidence to keep investing heavily in compute capacity into 2027.