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Alphabet Crushes Earnings Again, Reports 48% Cloud Revenue Growth
Written by Ryan Hasson. Originally Published: 2/5/2026.
Summary
- Alphabet topped earnings and revenue estimates for the third successive quarter, surpassing $400 billion in annual revenue for the first time.
- Google Cloud continues to be a standout growth engine, with Q4 revenue up 48% and backlog jumping to $240 billion as AI demand accelerates.
- Shares wobbled on hefty 2026 capex guidance, but aggressive AI investment underscores Alphabet’s push to sustain long-term leadership.
Alphabet (NASDAQ: GOOGL), the world's second-largest public company, once again delivered a standout earnings report, reinforcing its dominance across search, cloud, and artificial intelligence.
The tech giant reported its fourth-quarter and full-year 2025 results after the close on Wednesday, Feb. 4, topping expectations across the board and hitting a major milestone: more than $400 billion in annual revenue for the first time in company history.
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Get the full story on this opportunity now.Shares initially fell in after-hours trading, dropping as much as 6% as investors reacted to Alphabet's aggressive capital expenditure outlook for 2026. That move proved short-lived; by the end of extended trading, shares were down just 0.39% as the market weighed the strength of the results and the company's long-term growth investments.
Overall, the earnings report emphasized Alphabet's execution across core businesses, accelerating momentum in cloud computing, and rapid AI adoption across its ecosystem.
Alphabet Tops EPS and Revenue Estimates
For the third consecutive quarter, Alphabet beat both earnings and revenue expectations.
The company reported earnings per share of $2.82, ahead of consensus estimates of $2.59. Revenue was $113.83 billion, topping forecasts of $111.43 billion.
For the full year, Alphabet generated $402.8 billion in revenue and $10.81 in earnings per share (EPS), reflecting year-over-year growth of 17% in revenue and 34% in EPS. These results underline the company's ability to scale profitably while investing heavily in next-generation technologies.
Google Cloud again stood out as a primary growth driver. Fourth-quarter cloud revenue reached $17.66 billion, up 48% year over year and well above estimates of $16.18 billion. On an annualized basis, Google Cloud surpassed a $70 billion revenue run rate.
Demand visibility also strengthened: Alphabet said its cloud backlog rose 55% quarter over quarter to $240 billion, up from $155 billion in the September quarter. New enterprise customers during the period included Anthropic and Meta Platforms (NASDAQ: META), further validating Google Cloud's competitive position in the AI infrastructure race.
Search and YouTube Growth Stays Strong in Q4
Beyond cloud, Alphabet's core advertising engine continued to grow. Search revenue rose 17% year over year in the fourth quarter, suggesting that concerns about AI disruption have not materially dented Google's core business.
YouTube also posted solid results. In 2025, YouTube generated more than $60 billion in revenue from advertising and subscriptions combined. Across YouTube, Google One, and other services, Alphabet now counts 325 million paid consumer subscriptions, reinforcing the durability and diversification of its revenue streams.
On AI, Alphabet disclosed that Gemini now has more than 750 million monthly active users. The company also processes over 10 billion tokens per minute via direct API usage, highlighting rapid enterprise and developer adoption and explaining why Alphabet is prioritizing AI investment so aggressively.
2026 Capex Outlook: Why Spending Is Surging
Despite the strong operating performance, Alphabet's 2026 capital spending outlook grabbed investor attention. The company expects capital expenditures next year to range between $175 billion and $185 billion.
During the earnings call, Chief Financial Officer Anat Ashkenazi said the increased investment will primarily support AI compute capacity for Google DeepMind, meet growing cloud customer demand, and fund strategic investments across Alphabet's "Other Bets." She added that capex will also be aimed at improving user experience and boosting advertiser returns across Google's services.
While the size of the capex figure initially unsettled the market, it reflects the reality of competing at scale in AI and cloud infrastructure.
AI and Cloud Strategy: Alphabet Bets Big to Defend Leadership
Alphabet delivered another blowout quarter, executing across virtually every major business line. Cloud is scaling quickly and margins are expanding; search remains resilient; and YouTube contributes steady, high-margin growth. Gemini's adoption metrics suggest Alphabet's AI strategy is gaining meaningful traction.
The primary investor concern was the magnitude of the capital expenditure outlook. But sustained leadership in AI, cloud, and digital advertising requires continued, aggressive investment. Alphabet is clearly betting that spending heavily today will drive larger wins over the long term — and so far, that strategy appears to be paying off.
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