Alphabet (NASDAQ:GOOGL) released quarterly earnings that exceeded Wall Street expectations with strong results in advertising and explosive growth in Google Cloud.
Revenue rose 16%, reaching a record US$102.3 billion, above the forecast of US$99.9 billion. Net income totaled US$34.97 billion, equivalent to US$2.87 per share, compared to US$2.12 in the same period of 2024.
Excluding a US$3.5 billion European fine, the operating margin would have reached 33.9%. Alphabet shares rose as much as 5% in a check conducted after the announcement in after-hours trading on Wednesday, October 29, 2025, after closing the regular trading session up 2.65%, quoted at US$274.57. Year-to-date, the shares have advanced 45%, reflecting investor optimism about the company’s progress in the field of AI.
Google Cloud reported revenue of $15.2 billion, a 34% increase year-over-year, exceeding FactSet’s 30% expectation. The division posted operating profit of $3.59 billion, and its order backlog reached $155 billion.
The search business generated $56.6 billion in sales, up 15%, exceeding analysts’ forecasts. Even in the face of growing competition from OpenAI and other chatbots, Google maintained its dominance in digital advertising with solid monetization of its platforms.
Total advertising revenue reached US$74.18 billion, a 12.6% increase over 2024. YouTube, which celebrated its 20th anniversary, contributed US$10.26 billion, a 15% increase, driven by the expansion of podcasts and long-form videos, which reached 100 million hours watched daily.
The Other Bets division, which includes Verily (life sciences) and Waymo (autonomous cars), totaled revenue of US$344 million, with a loss of US$1.42 billion. The group highlighted plans to make these operations more independent and financially sustainable.
Investments in artificial intelligence continue to escalate. Alphabet revised its capital expenditure projection to $91-$93 billion in 2025, up from $85 billion in its previous estimate, aiming to expand its data center and AI server infrastructure.
Sundar Pichai highlighted the accelerated growth of Google Cloud and the advancement of Gemini, which already has 650 million monthly active users and processes seven billion tokens per minute, approaching ChatGPT, which has 760 million.
Alphabet has partnered with Anthropic to supply one million custom AI chips (TPUs). The deal, valued at approximately $10 billion annually, is expected to support up to 30% annual growth in the cloud through 2027.
Despite the high costs associated with AI, analysts maintain optimistic projections. Truist forecasts an average operating margin of 33%, supported by double-digit growth in search and cloud revenues. Bank of America highlighted that Gemini has reduced its market share loss to OpenAI.
Despite pressure from competitors, Alphabet’s business model remains strong. The company continues to derive 85% of its revenue from advertising and high-margin digital services, funding its expansion in AI and global infrastructure.
Operating cash flow reached US$130 billion in the last 12 months, although free cash flow fell 20% in the first half of the year, signaling the impact of investments. The company maintains a good liquidity position, with US$95 billion in cash and short-term investments.
With these latest results, Alphabet celebrates eleven consecutive quarters of exceeding profit forecasts.