Alphabet (GOOG/GOOGL) stock jumps after a record first-ever $100B quarter: Google earnings show ad strength, cloud acceleration, and a bigger AI capex bill

Bassyonni

ago 4 hours

Alphabet (GOOG/GOOGL) stock

Alphabet (GOOG/GOOGL) surged after-hours on Wednesday as Google earnings delivered a milestone quarter: revenue crossed $100 billion for the first time, with broad-based growth in Search, YouTube, subscriptions/devices, and an accelerating Google Cloud. Shares were up several percent into the close and extended gains after the print as investors cheered the combination of top-line surprise and durable AI demand.

Google earnings by the numbers

Revenue: ~$102.3 billion for Q3 2025, up ~16% year over year—Alphabet’s first $100B+ quarter.
EPS: ~$2.87, comfortably ahead of consensus.
Google Cloud: Revenue moved to roughly $15.1B, with operating income climbing as AI-heavy workloads (training and inference) scale.
Search & other: Continued double-digit growth, reflecting resilient advertiser budgets and improving retail and travel categories.
Capex (AI/datacenters): Full-year capital spending raised again, now guided in the low-$90B range, signaling continued build-out of AI infrastructure (compute, networking, data center capacity).

Management’s through-line: demand for AI services—across Search, Workspace, YouTube ads targeting, and Cloud’s model hosting—continues to outrun supply, necessitating yet another step-up in capital intensity.

Alphabet stock price: what moved the tape

Traders rewarded three themes:

Broad beat, not a single-engine story. Every major division posted at least double-digit growth, which reduces reliance on any one macro-sensitive revenue stream.
Cloud profitability getting real. As utilization rises and high-margin services attach, Cloud’s operating leverage is kicking in.
Visibility on AI capacity. A bigger capex guide is a cost today, but it reassures investors that Alphabet intends to meet demand during the 2026–2027 AI ramp.

Volatility watch: Shares popped more than 5% after hours. Expect choppy trading as models reset for higher revenue, higher depreciation, and potentially higher long-term margins if Cloud and ads keep compounding.

What the quarter tells us about Google’s AI flywheel

Alphabet’s AI thesis is turning into measurable P&L effects:

Search & YouTube: Better relevance and creative tools keep advertisers spending; AI-assisted formats lift conversion without spiking cost of goods.
Workspace & consumer apps: Copilot-style features deepen subscription value, nudging ARPU higher.
Google Cloud: Vertex AI, TPU-backed training/inference, and data products form a sticky platform; as customers scale, usage-based revenue compounds.

The trade-off: depreciation and energy bills rise with the build-out. Analysts will watch whether price/mix, utilization, and software attach outpace those cost lines through 2026.

Risks that still matter

Capex discipline: A low-$90B spend run-rate is massive. If supply chains or yields slip, the ROI timeline stretches.
Competitive pressure: Rivals in ads and cloud will keep pushing price/performance; any wobble in product velocity can show up quickly in growth rates.
Regulatory overhang: Antitrust and privacy frameworks can alter ad targeting, data use, or bundling.

Snapshot: GOOG/GOOGL and what to watch next

Price action: Both share classes rallied into the print and extended gains after hours, with intraday swings typical of earnings day. Year-to-date performance remains strong, reflecting AI-led multiple expansion and accelerating fundamentals.

Next catalysts:

Color on AI capacity for 2026 (chips, optical networking, and data center openings).
Cloud backlog and margin trajectory as AI customers shift from pilots to production.
Ads holiday setup: Retail, travel, and SMB demand through November–December.

Quick FAQ for searchers

GOOG vs. GOOGL stock price
They’re two share classes of Alphabet; both typically move in tandem around earnings.

Google earnings—what beat?
Revenue and EPS both topped expectations, with the standout mix of strong Search/YouTube and faster-growing, increasingly profitable Cloud.

Alphabet stock outlook
If Cloud margins keep expanding and ad growth holds double digits, estimates for 2026–2027 likely drift higher. The swing factor is execution on that record capex plan turning into capacity, then into cash flow.

Alphabet’s first $100B quarter wasn’t a one-off. It reflected synchronized growth across ads, subscriptions/devices, and a Cloud business benefiting directly from the AI wave. With capex marching higher to meet demand, investors will live with heavier depreciation today in exchange for a larger AI-era earnings base tomorrow.