Google parent beats on revenue, projects significant AI spending increase

Here's how the company did, compared with estimates from analysts polled by LSEG:

• Earnings per share: $2.82 vs. $2.63 estimated
• Revenue: $113.83 billion vs. $111.43 billion estimated

Wall Street was also watching several other numbers in the report:

• Google Cloud: $17.66 billion vs. $16.18 billion, according to StreetAccount
• YouTube advertising: $11.38 billion vs. $11.84 billion, according to StreetAccount
• Traffic acquisition costs: $16.59 billion vs. $16.20 billion, according to StreetAccount

The company said it expects 2026 capital expenditures to be in the range of $175 billion to $185 billion — nearly double its 2025 spend. The company said in October that it expected "a significant increase" to capex in 2026.

The company saw revenue increase almost 18% year over year. Net income came in at $34.46 billion, up almost 30% compared to the year prior.

Advertising revenue came in at $82.28 billion, up 13.5% from a year ago.

Google Cloud beat Wall Street's expectations, recording a 47% increase in revenue from a year ago. Google's Cloud unit houses most of the company's AI services and products.

Revenue for YouTube ads increased almost 9% to $11.38 billion, but it fell short of analysts' expectations of $11.84 billion.

Other Bets, which includes the company's life sciences unit Verily and self-driving car unit Waymo, reported revenue of $370 million during the quarter, down 7.5% from a year ago. Alphabet reported Other Bets' loss of $3.61 billion, a year-over-year increase of more than 200%.

Waymo took a $2.1 billion employee compensation charge for the quarter, as it raised a new funding round at a $16 billion valuation. 

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