Alphabet, the parent company of Google, reported a 12 per cent increase in revenue and a quarterly profit of $34.5 billion, boosted by strong performance in its cloud computing and artificial intelligence divisions.
Total revenue rose to $90.2 billion year-over-year, with the cloud segment growing 28 per cent to $12.3 billion. CEO Sundar Pichai credited the results to the company’s broad operational expansion, highlighting Alphabet’s “unique full stack approach to AI” as a key growth driver. He also praised the company’s Gemini software, calling it an “extraordinary foundation” for continued innovation.
Following the announcement, Alphabet’s shares rose over 3 per cent in after-hours trading. Pichai further emphasized growing demand for data center-hosted solutions and the rapid adoption of its cloud services.
Analysts continue to evaluate Alphabet’s substantial investments in AI. Yory Wurmser, principal analyst at eMarketer, noted, “Cloud’s growth indicates that Google’s AI product mix continues to thrive despite heightened competition.” However, the emergence of cost-effective AI models like China’s DeepSeek is prompting questions about the sustainability of current investment levels.
Despite the strong financial performance, Alphabet is facing significant legal challenges. The US Department of Justice is pursuing antitrust actions that could force Google to divest key assets, including its Chrome browser, arguing that AI advancements could entrench its dominance in search.
Assistant Attorney General Gail Slater stressed the stakes, stating, “Nothing less than the future of the internet is at stake.” District Judge Amit Mehta, who previously ruled that Google maintained an illegal search monopoly, is overseeing the case.
Google strongly contests the proposed remedies, with Kent Walker, president of global affairs, arguing that the case primarily concerns partnership agreements with companies like Apple and Samsung.
In a separate case, Judge Leonie Brinkema found Google to have illegally dominated the online advertising technology market, threatening its core revenue stream. The rulings could lead to significant restructuring and diminished market power for the company.
Alphabet has confirmed it will appeal both decisions, according to AFP reports.
