A month has gone by since the last earnings report for Alphabet (GOOGL). Shares have added about 1.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Alphabet due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Alphabet Q1 Earnings & Revenues Beat Estimates, Up Y/Y
Alphabet delivered first-quarter 2026 earnings of $5.11 per share, up 82% year over year and ahead of the Zacks Consensus Estimate by 93.6%. Consolidated revenues rose 21.8% year over year to $109.9 billion.
Net revenues excluding traffic acquisition costs (the portion of revenues shared with Google’s partners and the amount paid to distribution partners and others who direct traffic to Google’s website) came in at $94.67 billion, topping the Zacks Consensus Estimate of $92.22 billion by 2.7%. Strength across Search and a sharp acceleration in Google Cloud, alongside rising AI-driven subscription adoption, stood out this quarter. A key theme in management’s commentary was the company’s “full stack” AI approach, spanning custom silicon, infrastructure and first-party models.
GOOGL’s Services Ride on Search & YouTube
Google Services revenues increased 16% year over year to $89.64 billion, supported by broad-based advertising and subscription growth. Search & other revenues rose 19.1% year over year to $60.4 billion, with management citing AI experiences as a catalyst for higher usage and queries at an all-time high. Google advertising revenues increased 15.5% year over year to $77.25 billion and accounted for 70.3% of total revenues.
Within advertising, YouTube ads grew 10.7% to $9.88 billion, while Google Network revenues declined 4% to $6.97 billion. Subscriptions, Platforms and Devices revenues climbed 19.3% year over year to $12.38 billion, reflecting continued momentum in YouTube subscriptions and Google One, including increased demand for consumer AI plans.
Other Bets’ revenues were $411 million, down 8.7% year over year, and accounted for 0.4% of first-quarter revenues.
Google Cloud Benefits From Enterprise Adoption
Google Cloud revenues surged 63% year over year to $20 billion and accounted for 18.2% of the quarter’s total revenues.
Management attributed the acceleration to strong performance across Google Cloud Platform, enterprise AI solutions, enterprise AI infrastructure and core services such as cybersecurity and data analytics. The quarter also featured a sharp step-up in contracted demand, with Cloud backlog reaching roughly $462 billion at quarter end.
In Google Cloud, management noted that TPU hardware agreements are included in the reported backlog, though the majority remains typical GCP contracts, with just over half of the backlog expected to be recognized as revenues over the next 24 months.
