Shares of Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) ascended to new highs on Thursday after the technology colossus reported staggering artificial intelligence (AI)-fueled gains.
Image source: The Motley Fool.
Alphabet’s revenue leaped 22% year over year to $109.9 billion in the first quarter.
The search king is asserting its dominance in the AI race.
Shares of Alphabet (GOOGL +10.06%) (GOOG +9.97%) ascended to new highs on Thursday after the technology colossus reported staggering artificial intelligence (AI)-fueled gains.
Image source: The Motley Fool.
Search remains a cash cow
Alphabet’s revenue leaped 22% year over year to $109.9 billion in the first quarter.
Google Search revenue rose 19% to $60.4 billion, helping to dispel fears of competition from AI chatbots from the likes of OpenAI and Anthropic.
“People love our AI experiences like AI Mode and AI overviews, and they’re coming back to search more,” CEO Sundar Pichai said during a conference call with analysts.
Alphabet
Today’s Change
(10.06%) $35.21
Current Price
$385.15
Winning in the cloud
Alphabet’s cloud computing results were even more impressive. Google Cloud revenue rocketed 63% higher to $20 billion, and the division’s backlog almost doubled to more than $460 billion.
“Cloud accelerated again this quarter due to strong demand for our AI products and infrastructure,” Pichai said.
All told, Alphabet’s operating income jumped 30% to $39.7 billion. The AI leader’s net income, boosted by gains on its investments, soared 81% to $62.6 billion, or $5.11 per share.
Spending big to drive further gains
These strong results and encouraging ongoing usage trends prompted Alphabet to increase its growth investments. Management now projects full-year capital expenditures of $180 billion to $190 billion in 2026, up from a prior forecast of $175 billion to $185 billion.
“We are seeing unprecedented internal and external demand for AI compute resources,” chief financial officer Anat Ashkenazi said. “The investments we are making in AI are delivering strong growth, as evidenced by the record revenue and backlog growth in Google Cloud and strong performance in Google services.”
