ALPHABET REPORTS RECORD $400BN ANNUAL REVENUE, EYES MASSIVE AI INVESTMENTS
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By Aishat Momoh. O.
Alphabet, the parent company of Google, on Wednesday reported record-breaking earnings, with annual revenue surpassing $400 billion for the first time, driven by strong growth in cloud computing and artificial intelligence (AI) initiatives.
The tech giant said revenue for the quarter rose 18 percent year-on-year, with fourth-quarter revenue reaching $113.8 billion. Profit for the quarter stood at $34.5 billion, supported by a 48 percent surge in cloud computing revenue to $17.7 billion. Google’s core search and advertising business generated $82.3 billion, up from $72.5 billion the previous year, while YouTube advertising revenue grew to $11.4 billion from $10.5 billion.
Chief Executive Sundar Pichai said the company faces strong demand for AI products, noting that supply has struggled to keep pace with growth. “We’ve been supply constrained even as we’ve been ramping up our capacity,” he said on an earnings call.
Alphabet’s Gemini AI saw rapid adoption, ending the year with 750 million monthly users, an increase of 100 million from the previous quarter. Analysts expect Google to challenge OpenAI for leadership in the AI sector this year.
The company plans to nearly double its capital expenditures in 2026, projecting $175 billion to $185 billion in spending to expand AI infrastructure and meet growing customer demand.
Alphabet’s consumer services now boast over 325 million paid subscriptions, including Google One and YouTube Premium. Its cloud division, competing with Amazon Web Services and Microsoft Azure, has become a critical growth engine for the company.
Despite the overall strong performance, Alphabet’s experimental “Other Bets” segment, which includes autonomous vehicle unit Waymo, posted a loss of $3.6 billion on revenues of $370 million. Waymo recently raised $16 billion in funding, valuing the subsidiary at $126 billion, with Alphabet as the majority investor. The unit now provides over 400,000 rides weekly across six major U.S. metropolitan areas and more than tripled its annual ride volume to 15 million.
The company also continues to navigate regulatory scrutiny. A U.S. court ruling spared Alphabet from selling its Chrome browser, while the company plans to appeal a federal judge’s ruling that it held an illegal monopoly on online search.
Alphabet shares were down slightly more than one percent in after-market trading following the earnings release.
This report underscores Alphabet’s strategy of leveraging robust advertising revenue to fuel aggressive AI and cloud investments while maintaining leadership in digital search and consumer services.
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