Alphabet Inc. (NASDAQ:GOOG) delivered first-quarter results well ahead of Wall Street expectations, supported by rapid expansion in its Cloud division and continued momentum in Search.
The company reported adjusted earnings per share of $5.11, comfortably above the $2.62 consensus estimate. Revenue came in at $109.9 billion, topping the $106.81 billion forecast and rising 22% year over year, or 19% on a constant currency basis. This performance marked the company’s 11th straight quarter of double-digit growth.
Shares of Alphabet Inc. climbed 4.1% by 04:35 ET, as investors responded positively to the company’s AI-driven gains across multiple business lines.
Cloud division leads growth with AI-driven demand
Google Cloud stood out as the strongest contributor, with revenue jumping 63% to $20 billion. Growth was driven by enterprise adoption of AI tools, infrastructure demand, and continued strength in Google Cloud Platform offerings.
The segment’s backlog nearly doubled from the previous quarter, surpassing $460 billion, signaling sustained demand ahead.
Meanwhile, Google Services revenue rose 16% to $89.6 billion. Within that segment, Search & other revenue increased 19%, YouTube advertising grew 11%, and subscriptions, platforms, and devices advanced 19%.
AI investments continue to power core businesses
CEO Sundar Pichai highlighted the broad impact of AI across the company’s ecosystem, stating, “2026 is off to a terrific start. Our AI investments and full stack approach are lighting up every part of the business,” said Sundar Pichai, CEO of Alphabet and Google. “Search had a strong quarter with AI experiences driving usage, queries at an all time high, and 19% revenue growth.”
Profitability and subscriptions show strong momentum
Alphabet expanded its operating margin by 2 percentage points to 36.1%, reflecting improved efficiency alongside revenue growth. Net income surged 81%, supported in part by a $37.7 billion gain, largely tied to unrealized appreciation in non-marketable equity investments.
The company also reported that total paid subscriptions reached 350 million, driven by services such as YouTube and Google One. In addition, Gemini Enterprise recorded 40% quarter-over-quarter growth in paid monthly active users, underscoring rising demand for AI-powered workplace tools.
Dividend increase and outlook in focus
Alphabet announced a 5% increase to its quarterly dividend, raising it to $0.22 per share.
Analysts at Bank of America noted that investor focus will shift toward second-quarter commentary, particularly trends in advertising demand, cloud growth, and capital expenditures, which are expected to shape the stock’s near-term direction.