Alphabet’s shareholders have been openly voicing concerns that the company’s massive investments in artificial intelligence may not be yielding sufficient returns. However, the latest earnings report should help ease those anxieties. The key takeaway? Google’s cloud division—fueled largely by enterprise AI adoption—is experiencing explosive growth.

The search giant reported that Google Cloud revenue surged 82% compared to the same period last year, reaching $24.8 billion. This far exceeds the previous quarter’s already impressive year-over-year growth of 63%, which brought in $20 billion. It also handily surpassed Wall Street’s expectations of $22.46 billion for this quarter. The company attributed these gains primarily to enterprise AI solutions and the adoption of enterprise AI infrastructure. Additionally, Google noted that its cloud contracting backlog—work that has been contracted but not yet converted into revenue—has climbed to $514 billion.

According to the earnings report, Alphabet’s profit soared to $112.1 billion, a massive leap from $28.1 billion in the same period last year. Overall, Alphabet’s revenue grew 24% year-over-year during the past quarter, totaling $119.8 billion. Google Services also saw a 15% increase in revenue, reaching $94.5 billion. “Our AI investments are redefining what’s possible across every part of our business,” said Google CEO Sundar Pichai during Wednesday’s earnings call. “We have exciting momentum across the board.”

Adoption of Gemini, Google’s AI chatbot, is also on the rise. The company revealed that the app now boasts 950 million monthly active users, up from 750 million in Q4 of 2025. It’s worth noting that surging revenue is not unusual for Google—this marks the company’s 12th consecutive quarter of double-digit revenue growth. Yet, even by that standard, this quarter stands out as a particularly prosperous period for the tech giant.

Despite these strong results, Alphabet’s spending remains substantial. The company estimates its capital expenditures—funds allocated to building data centers, purchasing chips, and expanding infrastructure—will range between $180 billion and $190 billion for the year. This fact was not lost on analysts during Wednesday’s earnings call, several of whom pressed Pichai on when and how much these investments will pay off. “I think our compute capacity investments in ’27,” he responded. “We are seeing strong demand indicators, including long-term deals,” he continued. “I think, if anything, the dynamics look healthier than where we were about a year ago, so that’s what gives us the confidence to undertake those investments.”