April 30, 2026, 03:03 PDT—Mountain View, California.
Alphabet Inc. climbed 6.1% in premarket trade Thursday, lifted by a blowout quarter from Google Cloud that pointed to AI investments paying off. Meta Platforms and Microsoft, on the other hand, edged lower after detailing their own spending strategies.
Investors are grappling with one key question: can the AI push actually deliver sales, not just hype? For this quarter, Alphabet pointed to Cloud as its answer.
Hard to ignore the timing here. Big Tech’s not only under the microscope for its AI launches—investors want to see those products quickly offsetting hefty chip, server, and power costs. Alphabet delivered: growth in Search and cloud, sidestepping the messier pitches from rivals asking shareholders for more patience.
Alphabet posted first-quarter revenue of $109.9 billion, a 22% increase. Google Cloud brought in $20.0 billion, up 63%. Google Search & other contributed $60.4 billion. Net income jumped 81%, reaching $62.6 billion, or $5.11 per diluted share, buoyed by a $36.9 billion gain on equity securities—which accounted for $2.35 per share. The company bumped its quarterly dividend up 5%, now at 22 cents. CEO Sundar Pichai noted that Search hit “queries at an all time high,” paid subscriptions stand at 350 million, and Waymo is logging more than 500,000 fully autonomous rides weekly. SEC
Revenue, excluding payouts to partners that funnel traffic to Google, landed at $94.7 billion, beating the $91.6 billion analysts had penciled in, Bloomberg said. Earnings per share? $5.11 — well past the $2.62 forecast from Wall Street.
Cloud has become the benchmark for investors sizing up AI-related spending. Alphabet bumped up its 2026 capex outlook, landing in the $180 billion to $190 billion range. That’s money pouring into things like servers, chips and sprawling data centers. The tech giant has also started selling its proprietary TPUs — those are its in-house AI chips — directly to select customers. Its cloud backlog, essentially future revenue under contract, almost doubled and now sits at roughly $460 billion. Thomas Monteiro from Investing.com called the increased capex “within the company’s spending power,” while Forrester analyst Lee Sustar thinks Google Cloud is now positioned to “significantly contribute” after posting losses for years. Reuters
Competitive signals are murky. Google Cloud lags Amazon Web Services and Microsoft Azure, yet the recent pickup hands Alphabet more narrative muscle in enterprise AI—right as clients weigh options outside Nvidia-centric platforms and single-cloud dominance.
But Alphabet isn’t just a cloud play. Advertising is still the company’s main revenue driver, with Search delivering more fuel for its AI ambitions than what most competitors can manage. The catch: even as search queries climb, using AI in Search could disrupt ad formats and pricing.
The risk is clear: any pause in enterprise AI projects, or delays in new data-center buildouts, leaves Alphabet eating extra depreciation and power expenses while waiting for a payoff. That backlog-to-cash lag could easily undercut the current sense of capex security.
A governance cloud hangs over Alphabet too. Some shareholders are demanding the company spell out how it monitors government access to its cloud and AI platforms. Marcela Pinilla of Zevin Asset Management points to cloud offerings “getting more and more militarized,” labeling Alphabet’s oversight as “very risky” if it stays lax. Reuters
European regulators threw in another twist. The Swiss competition authority has launched a probe, looking into claims that travel firms and online casinos struck deals to avoid bidding on each other’s branded search terms. Google and Microsoft’s Bing aren’t in the crosshairs, though ComCo said it plans to question the search platforms.
Alphabet faces clear hurdles in the short run. The cloud unit needs to keep turning AI interest into actual sales, search must maintain its edge even as AI rewires the platform, and spending can’t start looking excessive. Investors, for now at least, gave the company a pass on Thursday.
