Alphabet's AI investment lifts Cloud growth and backlog

Transcript intelligence

What changed

Compared with the prior quarter, management reported faster Cloud growth, a nearly doubled backlog reaching about $462 billion, and higher 2026 CapEx guidance of $180–$190 billion. Wiz was integrated into Google Cloud, while Gemini usage and enterprise adoption continued to expand.

Guidance delta

Overall guidance sentiment was maintained, while full-year 2026 CapEx guidance was raised to $180–$190 billion.

Key takeaways

• Revenue grew 22% year over year to $109.9 billion, with double-digit growth across major segments.
• Google Cloud revenue increased 63%, and the Cloud backlog approached $462 billion.
• Gemini enterprise users increased 40% quarter over quarter, and AI subscriptions continued to expand.
• Management is investing more heavily in TPUs, NVIDIA GPUs and data-center capacity to support demand.
• The quarter produced an EPS beat, but the investment cycle raises questions about margins and returns.

Management priorities

• Scale AI compute and data-center capacity, including new TPU generations and NVIDIA GPUs.
• Expand Gemini across Search, Maps, the Gemini app and enterprise workflows.
• Monetize AI through subscriptions, Search AI Mode and enterprise products.
• Convert the Cloud backlog and large AI contracts into revenue while expanding the partnership ecosystem.
• Integrate Wiz and continue building AI, cloud-security and enterprise capabilities.