Google CEO Sundar Pichai looks on during the AI Impact Summit in New Delhi on Feb. 19, 2026.
Ludovic Marin | AFP | Getty Images
Alphabet reported first-quarter earnings after the bell Wednesday, showing revenue that topped expectations boosted by its surging cloud business. Shares climbed following the report.
Earnings per share: $2.62 adjusted vs $2.63 expected by analysts polled by LSEG.Revenue: $109.9 billion vs $107.2 billion expected by analysts polled by LSEG
Wall Street was also watching several other numbers in the report:
Google Cloud: $20.03 billion vs. $18.05 billion estimated, according to StreetAccountYouTube advertising: $9.88 billion vs. $9.99 billion estimated, according to StreetAccount Traffic acquisition costs: $15.23 billion vs. $15.3 billion estimated, according to StreetAccount
The company beat Wall Street’s expectations for revenue, growing 20% from last year and marking its highest rate of growth for any quarter since 2022.
“Our enterprise AI solutions have become our primary growth driver for cloud for the first time in Q1,” CEO Sundar Pichai told analysts on the earnings call.
Gemini Enterprise’s paid monthly active users grew 40% from the previous quarter, Pichai said in a release.
The company also updated its 2026 capital expenditure guidance range to $180 billion to $190 billion, up from its previous estimate of $175 billion to $185 billion. Alphabet said in December it would acquire Intersect, a data center company, for $4.75 billion in cash and the assumption of debt.
Chief Financial Officer Anat Ashkenazi also said it expects the company’s 2027 CapEx to “significantly increase” compared to 2026.
Alphabet reported $35.7 billion in capital expenditures during the quarter. That includes real estate, servers, data centers and other infrastructure. Alphabet is pouring money into AI infrastructure to capitalize on exploding demand.
“We are compute constrained in the near term,” Pichai said on the earnings call. “Our cloud revenue would have been higher if we were able to meet the demand.”
Alphabet 1-day stock chart.
Alphabet stock has outperformed its “Magnificent Seven” peers this month, up 21%, and tech stocks are poised to wrap up their best month since April 2020, with the Nasdaq up 14% for the month as of Wednesday’s close.
Wall Street has been piling into the sector despite concerns that surging oil prices and supply chain disruptions from the Iran war will lead to rising costs for AI infrastructure. The four hyperscalers — Alphabet, Amazon, Meta and Microsoft — all reported results on Wednesday, updating investors for the first time since the U.S. began combat operations in Iran in late February.
Alphabet’s net income for Q1 2026 came in at $62.58 billion, or $5.11 per share, up 81% compared to the year prior. A year ago, net income was $34.54 billion, or $2.81 per share.
The company posted a $37 billion gain from equity securities, which analysts did not include in expectations for the quarter. Adjusting that out led to a 1 cent per share miss on the bottom line.
Google Cloud beat Wall Street’s expectations, recording a 63% increase in revenue from a year ago. Google’s Cloud unit houses most of the company’s AI services and products.
The company said the growth was led by an increase in Google Cloud Platform, or GCP, across enterprise AI Solutions and enterprise AI Infrastructure. The company said Google Cloud has a backlog of $460 billion.
Search had a strong quarter with AI experiences driving usage, with queries at an all-time high at 19% revenue growth.
Google’s advertising revenue came in at $77.25 billion, up 15.5% from the same time last year.
YouTube advertising missed Wall Street’s expectations, reporting $9.88 billion for the quarter. YouTube subscriptions are now growing faster than YouTube ads, said Chief Business Officer Philipp Schindler.
Other Bets, which includes Alphabet’s self-driving car company Waymo, brought in $411 million — down from the $450 million in the year-ago quarter. During the quarter, Waymo surpassed 500,000 fully autonomous rides a week, the company said Wednesday.
Waymo in February announced it raised $16 billion in a new round led by outside investors, valuing the company at $126 billion. Waymo said recently it’s ready to bring its self-driving vehicles to Orlando, Florida, and Dallas, Houston and San Antonio, Texas. During the quarter, the company began fully autonomous operations in Nashville, Tennessee, ahead of a planned commercial launch with Lyft later this year.
WATCH: AWS and Google Cloud should see strong acceleration
