Google revenue tops $400 billion for the first time after Alphabet reported strong earnings for the final quarter of 2025, driven by search advertising and rapid growth in cloud computing.
The US technology group said quarterly revenue reached $113.8 billion, marking an 18 percent increase year on year as the company sharply expanded spending on artificial intelligence infrastructure.
Alphabet executives said demand for AI-powered services continues to exceed available capacity, pushing the company to significantly raise capital investments in 2026.
Strong quarterly earnings and record annual revenue
Alphabet said profit for the fourth quarter reached $34.5 billion, reflecting sustained growth across its main business lines. Annual revenue surpassed $400 billion for the first time since the company was founded in 1998 by Larry Page and Sergey Brin.
Google’s core search and advertising division remained the main source of income, generating $82.3 billion during the quarter compared with $72.5 billion a year earlier.
YouTube advertising revenue also increased, rising to $11.4 billion from $10.5 billion, reinforcing the importance of online advertising to Alphabet’s overall financial position.
Cloud computing becomes a key growth engine
Revenue from Google Cloud surged 48 percent year on year to $17.7 billion, underscoring its growing role within Alphabet as it competes with Amazon Web Services and Microsoft Azure.
Executives said the cloud unit benefits directly from increased demand for AI tools and enterprise computing services, making it one of the company’s fastest growing segments.
Key cloud highlights include:
• 48 percent growth in quarterly revenue
• Expanded demand for AI-enhanced services
• Increased competition with major global cloud providers
AI investments and rising capital spending
Alphabet said it plans capital expenditures of between $175 billion and $185 billion in 2026, nearly double its spending in 2025. The company said the investment is required to meet customer demand for AI products and computing capacity.
Chief executive Sundar Pichai said Alphabet remains supply constrained despite aggressive expansion of infrastructure, pointing to continued pressure on data centers and AI hardware.
Major drivers behind the spending increase include:
• Expansion of AI data centers
• Scaling cloud infrastructure
• Supporting consumer and enterprise AI tools
Gemini AI user growth and subscriptions
Google’s Gemini AI platform continued to expand rapidly, ending 2025 with 750 million monthly users, an increase of 100 million from the previous quarter.
Alphabet also said it now has more than 325 million paid subscriptions across consumer services, including Google One and YouTube Premium, providing a stable source of recurring revenue alongside advertising.
Other Bets losses and market reaction
Despite strong overall performance, Alphabet’s experimental Other Bets division recorded a loss of $3.6 billion on revenues of $370 million. The unit includes autonomous vehicle company Waymo.
Waymo announced it raised $16 billion in a recent funding round that valued the company at $126 billion, with Alphabet remaining the majority investor.
Alphabet shares moved modestly in after-market trading, reflecting mixed investor reactions to strong earnings alongside sharply higher spending plans.
Conclusion:
Alphabet’s latest earnings confirm that AI investment has become central to the company’s growth strategy, with advertising and cloud computing financing record levels of capital spending. While profits remain strong, higher costs are set to define the next phase of competition in the global AI sector.
