Alphabet reports stronger revenue as cloud and AI spending rise

On 22 July 2026, Google parent Alphabet said Google's cloud business grew by more than 80 percent, beating investor expectations as markets looked for signs that the company's artificial intelligence spending was producing results.

Chief executive Sundar Pichai said the quarter's performance was helped by growth in the Gemini AI model, AI search queries and YouTube. He said more than 1.7 billion unique viewers watched videos related to the 2026 FIFA World Cup on YouTube. Pichai said Alphabet's AI investments were changing what the company could do across its business.

Alphabet said total revenue between April and June was more than $119 billion, up 24 percent from the same period a year earlier. It said its cloud business recorded more than $24 billion in revenue for the quarter, and that net profit tripled to more than $112 billion. The company also said the Gemini app had grown to 950 million monthly active users.

The source said that figure put Gemini close to OpenAI's ChatGPT, which reached 1 billion monthly active users in June, according to reports.

Chief financial officer Anat Ashkenazi told analysts that Alphabet spent nearly $45 billion in the quarter, with the vast majority going toward AI investments. The company raised its full-year capital expenditure estimate to as much as $205 billion, up from $190 billion in the previous quarter.

Ashkenazi said the higher estimate was mainly because the company was speeding up delivery of capacity to meet growing demand. She said Alphabet still expected capital expenditure to rise significantly in 2027 and would give more details later.

Alphabet's stock moved unevenly in after-hours trading and fell by more than 4 percent.

Large US technology companies have been spending billions of dollars on AI infrastructure and on more advanced AI models. In June, Alphabet announced it would raise up to $80 billion in stock to support its AI work, with Warren Buffett's Berkshire Hathaway committing $10 billion. The source said Amazon, Microsoft, Alphabet and Meta were together on track to spend about $700 billion this year on AI data centers, chips and computing infrastructure.

AI developers are also building lower-cost versions of their models as they compete for customers. Google launched three new models under the name Flash on Tuesday, describing them as cheaper, faster and more reliable. The source said cheaper and faster models from Chinese developers, including DeepSeek and Moonshot, had raised concerns in the United States about intellectual property theft.

White House technology official Michael Kratsios this week accused Moonshot of creating its new Kimi K3 model from Anthropic's Fable model. The source described distillation as a method in which a smaller AI model is trained to copy the outputs of a larger, more capable one.