Google revenue surpasses $400bn as AI and cloud growth power strong earnings

Google parent company Alphabet reported strong financial results, with annual revenue exceeding $400 billion for the first time as heavy investment in artificial intelligence and cloud computing fueled growth. The company said quarterly revenue rose 18 percent year-on-year, while total annual earnings reflected continued expansion across its core businesses.

Alphabet plans to significantly increase spending to stay competitive in the global AI race, forecasting capital expenditures between $175 billion and $185 billion in 2026—nearly double the previous year’s investment. Chief executive Sundar Pichai said demand for AI-driven services remains extremely strong, noting that the company is still facing supply constraints even as it expands infrastructure.

The company reported $113.8 billion in revenue for the final quarter of 2025, with profit reaching $34.5 billion. Cloud computing emerged as a major growth driver, with revenue jumping 48 percent to $17.7 billion, while Google’s search and advertising business remained its largest revenue source at $82.3 billion. YouTube advertising revenue also increased to $11.4 billion, and total paid subscriptions across services like YouTube Premium and Google One surpassed 325 million.

Google’s Gemini AI platform saw rapid adoption, ending the year with 750 million monthly users—an increase of 100 million from the previous quarter. Analysts suggested Google could challenge rivals for the leading position in AI development this year.

Despite strong results, Alphabet shares dipped slightly in after-market trading. The company continues to benefit from a recent US court decision allowing it to keep its Chrome browser, though it is appealing a separate ruling related to search market dominance.

Meanwhile, Alphabet’s experimental “Other Bets” division posted a loss of $3.6 billion on relatively small revenues. Autonomous driving subsidiary Waymo raised $16 billion in a new funding round valuing the unit at $126 billion. Waymo reported rapid growth in operations, delivering more than 400,000 weekly rides across six major US cities and tripling its annual ride volume to 15 million last year.