Google Hits Historic $100 Billion Quarter as AI and Cloud Drive Record Growth

Alphabet Delivers First-Ever USD 100 Billion Quarter

Google delivered a standout performance this quarter, with the stock rising 3 percent and momentum likely to continue in the near term. Among the Magnificent Seven, Google is showing some of the earliest and clearest signs of turning its high capital expenditure into real business value. What separates Google from its peers is its ability to vertically integrate this spending across its ecosystem, linking AI infrastructure, cloud services, and advertising to create synergies that lift efficiency and drive stronger top-line growth.

The company posted its first-ever USD 100 billion quarter, up 16 percent year over year, led by Google Search at USD 56 billion (+15%), YouTube Ads at USD 10 billion (+15%), and a standout Google Cloud segment at USD 15 billion (+34%). This quarter underscores how Google is executing with precision, investing heavily but doing so in a way that’s starting to translate into measurable performance gains, a sign of discipline that sets it apart in today’s AI-driven market.

What are the Best MAG 7 ASX Stocks to invest in right now?

Check our buy/sell tips

GOOG Delivers Strong Profit Growth Despite EU Fine, Driven by Cloud and AI Efficiency

GOOG continues to show exceptional operational efficiency, driven by the successful integration of AI-enabled productivity gains across its core business. Operating income rose 9 percent to USD 31.2 billion, with an operating margin of 30.5 percent. Similar to Meta, Google faced a one-off European Commission fine of USD 3.5 billion, which temporarily weighed on results. Excluding this item, operating income would have increased 22 percent, underscoring the company’s strong performance.

Net income climbed 33 percent to USD 34.98 billion, or USD 2.87 per share, supported by continued strength in Google Cloud, now a major profit driver and high-margin revenue stream. This shift gives GOOG more flexibility to reinvest aggressively into AI infrastructure without compromising overall profitability.

GOOG Posts USD 48 Billion in Cash Flow

When we look at how these profits convert to cash, the results are equally impressive. Operating cash flow reached USD 48 billion, highlighting the scalability and high-margin nature of Google’s business model. Free cash flow came in at USD 24 billion, demonstrating the company’s ability to balance significant reinvestment with continued balance sheet strength. Similar to Meta, Google raised its capital expenditure guidance to USD 91–93 billion, reflecting heavy investment in data centres and AI infrastructure to support the growing demand for Gemini model training and AI-driven search integration.

CEO Sundar Pichai described it as a “terrific quarter,” highlighting that Alphabet’s full-stack AI strategy is now translating into real business momentum. The company’s Gemini AI model has reached 650 million monthly users, while Google Cloud’s backlog climbed to USD 155 billion, reflecting strong enterprise demand for AI and data services.

The Investors’ Takeaway for Google

In our view, GOOG remains one of the most effective in turning high levels of capital expenditure into tangible value. While the pace of investment is still intense, the company appears to be deploying capital efficiently, using its scale and AI integration to enhance productivity across its ecosystem. Google Cloud continues to be a standout performer, its high-margin profile not only supports earnings growth but also helps maintain a robust cash flow position, giving the business both flexibility and resilience as it doubles down on AI infrastructure.