Google Cloud Revenue Soars 63%, Accelerating Growth Continues
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy GOOGL?
Source: NASDAQ.COM
- Significant Cloud Growth: Google Cloud revenue surged 63% year-over-year to $20 billion, marking its first quarter surpassing the $20 billion threshold, indicating strong performance in the rapidly growing cloud market and expected to enhance market share further.
- Profitability Improvement: The cloud segment's operating income reached approximately $6.6 billion in Q1, with operating margin expanding from 17.8% last year to 32.9%, which not only strengthens the company's profitability but also provides a robust financial foundation for future investments.
- Capital Expenditure Surge: First-quarter capital expenditures more than doubled year-over-year to $35.7 billion, with management raising 2026 capital expenditure guidance to $180 billion to $190 billion, which, while compressing free cash flow, lays the groundwork for future growth.
- Strong Market Demand: Google Cloud's remaining performance obligations hit $462 billion, nearly doubling from $240 billion three months prior, indicating that over half of these obligations are expected to convert to revenue in the next 24 months, reflecting robust market demand and customer confidence.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 349.940
Low
305.00
Averages
374.25
High
400.00
Current: 349.940
Low
305.00
Averages
374.25
High
400.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Substantial Capital Expenditure: First-quarter capital expenditures more than doubled year-over-year to $35.7 billion, with management raising 2026 capital expenditure guidance to $180 billion to $190 billion, reflecting ongoing investment pressures in infrastructure.
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- Profitability Improvement: The cloud segment's operating income reached approximately $6.6 billion in Q1, with operating margin expanding from 17.8% last year to 32.9%, which not only strengthens the company's profitability but also provides a robust financial foundation for future investments.
- Capital Expenditure Surge: First-quarter capital expenditures more than doubled year-over-year to $35.7 billion, with management raising 2026 capital expenditure guidance to $180 billion to $190 billion, which, while compressing free cash flow, lays the groundwork for future growth.
- Strong Market Demand: Google Cloud's remaining performance obligations hit $462 billion, nearly doubling from $240 billion three months prior, indicating that over half of these obligations are expected to convert to revenue in the next 24 months, reflecting robust market demand and customer confidence.
See More
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- Outstanding Cloud Performance: Google Cloud revenue skyrocketed 63% to $20 billion, with backlog nearly doubling to over $460 billion, demonstrating that robust demand for AI products and infrastructure is driving accelerated growth in the cloud segment.
- Substantial Net Income Increase: Alphabet's net income soared 81% to $62.6 billion, or $5.11 per share, boosted by investment gains, reflecting significant returns on the company's investments in AI and further solidifying its market leadership.
- Increased Capital Expenditures: Management now projects capital expenditures for 2026 to rise to $180 billion to $190 billion, up from a prior forecast of $175 billion to $185 billion, highlighting the company's recognition of unprecedented internal and external demand for AI computing resources.
See More
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- Amazon Cloud Growth: Amazon Web Services experienced its fastest growth in over three years, fueled by rising enterprise demand for AI tools, prompting Morgan Stanley to raise its price target to $330, reflecting confidence in cloud performance.
- SanDisk's Revenue Boom: SanDisk posted a staggering 251% year-over-year revenue increase to $5.95 billion in Q3, driven by heightened demand for data center memory, showcasing the success of its shift from consumer storage to enterprise clients.
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See More
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- Substantial Net Income Increase: Alphabet's net income soared 81% to $62.6 billion, or $5.11 per share, boosted by investment gains, reflecting the company's strong profitability and leadership in the AI sector.
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