Alphabet (NASDAQ:GOOGL) reported fourth-quarter results that handily beat Wall Street expectations, as the search giant proved that its heavy investments in generative AI are beginning to pay off through resurgent advertising growth and a surging cloud business.
The Mountain View, California-based company posted net income of $34.46 billion, or $2.82 per share, for the final three months of 2025.
The results comfortably cleared the $2.57 per share consensus estimate from analysts surveyed by Zacks Investment Research.
Revenue rose 18% to $113.83 billion, driven by double-digit gains in Search and YouTube, while Google Cloud revenue surged 48% to $17.7 billion—reflecting massive enterprise demand for the company’s Gemini 3 AI models.
CEO Sundar Pichai noted that annual revenues exceeded $400 billion for the first time, fueled by "expansionary moments" in Search driven by AI Overviews.
YouTube's annual revenue also crossed the $60 billion threshold, supported by a growing base of 325 million paid subscriptions.
Despite the record profits, the company signaled it will not be slowing down its infrastructure build-out.
Alphabet projected 2026 capital expenditures in the range of $175 billion to $185 billion as it races to defend its $4 trillion valuation against intensifying competition in the AI sector.