This article first appeared on GuruFocus.
Alphabet (GOOGL, Financials) beat revenue expectations for the first quarter, aided by record growth in Google Cloud as demand for artificial intelligence from businesses soared.Earnings jumped 22% from a year ago to $109.9 billion, topping Wall Street projections of $107.2 billion. Google Cloud revenue rose 63% to $20 billion, its largest reported gain since Alphabet started breaking out the division in 2020.For the first time, Google Cloud’s growth was led by enterprise AI solutions, said Chief Executive Sundar Pichai. Sales of those products increased eightfold compared to a year earlier.Cloud operating income surged to $6.6 billion from $2.2 billion a year earlier, driven by increased profitability and robust demand.Alphabet also lifted its 2026 capital spending outlook to $180 billion to $190 billion as it builds out more AI technology. Cloud backlog climbed almost double to $460 billion, the business reported.Investors will be looking for a sign that Alphabet can continue to turn AI demand into cloud sales, while keeping a lid on escalating costs.
