Alphabet reported a strong fourth quarter, pushing annual revenue beyond $400 billion for the first time, as demand for AI-powered cloud and advertising services continued to climb.
The Google parent said revenue rose 18 per cent year-on-year in the quarter, while profit reached $34.5 billion. Cloud revenue surged 48 per cent to $17.7 billion, reinforcing its role as a key growth engine alongside Google’s core search and advertising business.
Despite the gains, Alphabet signalled that spending will rise sharply. The company expects capital expenditures of between $175 billion and $185 billion in 2026—nearly double its 2025 investment—as it races to expand AI infrastructure.
“We’ve been supply-constrained even as we’ve been ramping up our capacity,” chief executive Sundar Pichai said, noting that demand for AI services continues to outpace available computing power.
Google’s Gemini AI ended the year with 750 million monthly active users, up by 100 million from the previous quarter, as AI features drove increased engagement across Search and other products.
Advertising remained Alphabet’s largest revenue source, generating $82.3 billion during the quarter, while YouTube ad revenue climbed to $11.4 billion. The company also reported more than 325 million paid subscriptions across consumer services such as YouTube Premium and Google One.
Alphabet shares dipped slightly in after-hours trading, even as analysts highlighted the company’s strong cash flow advantage in funding AI expansion.
Meanwhile, Alphabet’s “Other Bets” division posted a loss of $3.6 billion, though autonomous driving unit Waymo raised $16 billion in new funding, valuing the subsidiary at $126 billion as it scales its self-driving ride services across major U.S. cities.
