Alphabet, Google’s parent company, sees first-quarter revenue jump 22% as AI investment drives growth

[Financial News] Alphabet Inc., Google’s parent company, posted results in the first quarter that far exceeded market expectations, driven by sharp growth in its cloud business and strong performance from its artificial intelligence model, Google Gemini.
According to foreign media including The Wall Street Journal (WSJ) on the 29th, Google reported revenue of $110 billion in the previous quarter, up 22% from a year earlier, beating analysts’ expectations.
Net profit for the period also rose 81% from a year earlier to $62.6 billion.
The Journal said Alphabet’s massive AI investments are paying off as demand for cloud computing infrastructure continues to rise.
Alphabet also achieved $20 billion in cloud revenue, a 63% increase from a year earlier.
Sundar Pichai, CEO of Alphabet Inc., expressed strong confidence in the results, saying, "AI is lighting up every part of the business."
As demand surged for enterprise AI solutions and computing power, Alphabet’s cloud backlog nearly doubled from $240 billion in the previous quarter to $460 billion. The company expects about half of that to convert into revenue within the next two years.
Alphabet also revised its aggressive CapEx plan to strengthen its AI leadership. It raised its investment outlook for this year from $175 billion to $185 billion to $180 billion to $190 billion, and Chief Financial Officer Anat Ashkenazi said, "Capital spending in 2027 will increase much more than in 2026."
Its semiconductor competitiveness also stood out. Google recently unveiled its eighth-generation Tensor Processing Unit (TPU), reducing its reliance on Nvidia Corporation while maximizing efficiency. This time, it decided not only to provide access through its cloud platform, but also to sell AI chips directly to some customers. The move is expected to create a new revenue stream for Google’s hardware business.
Gemini 3, launched in November last year, is rapidly expanding its market share after outperforming competing models in benchmark tests.
OpenAI’s ChatGPT, which has 900 million weekly users, was also reported to have fallen short of its revenue target last year because of Gemini’s challenge.
Google’s traditional search business is also evolving with AI. After the introduction of the chatbot-style AI Mode and AI Overviews, which provide summary information at the top of search results, search revenue rose 19% from a year earlier to $60.4 billion.
Legal risks also appear to have eased significantly. A recent ruling by the Federal Court of the United States rejected severe penalties, including forcing Google to sell its Google Chrome web browser, in a lawsuit over its search monopoly. The judge said harsh sanctions were unnecessary because "AI competition has already made the search market more competitive."
Buoyed by these positive developments, Alphabet’s stock rose more than 6% in after-hours trading following the earnings release. After surging 65% last year and rising about 10% this year, Alphabet joined Nvidia Corporation in the $4 trillion market cap club.

jjyoon@fnnews.com Yoon Jae-jun Reporter