Alphabet Inc. reported first-quarter earnings Wednesday that far exceeded analyst expectations, with profit surging 81% year over year as the company’s aggressive investments in artificial intelligence continued to deliver returns across its core businesses. The Mountain View company earned $62.6 billion, or $5.11 per share, during the January-March period, on revenue of $109.9 billion, a 22% increase from the same quarter last year.
Alphabet’s stock rose more than 6% in after-hours trading following the announcement, setting up a potential new all-time high when markets open Thursday. The company’s market value currently stands at $4.2 trillion, more than double the $1.9 trillion it carried just one year ago. CEO Sundar Pichai said the company’s AI investments, made over the past three years, “are lighting up every part of the business.”
Digital advertising remained the primary engine of growth, with revenue from Google’s search-driven ad operations climbing 16% from the prior year’s first quarter. It marked the fourth consecutive quarter in which Google’s ad sales grew by more than 10% year over year. Google Cloud was the fastest-growing division, with revenue surging 63% from a year ago to $20 billion, driven by demand from corporate customers and government agencies including a recently announced deal with the US military.
The results arrive as Alphabet continues to pour capital into AI infrastructure at a scale that has made some investors uneasy. The company has earmarked between $175 billion and $185 billion for capital expenditures in 2026, the bulk of it directed toward AI data centers, on top of $91 billion spent last year. Alphabet has maintained that the risk of underinvesting in AI outweighs the risk of overspending, and Wednesday’s results offered the clearest evidence yet that the strategy is working.
