Key Points
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Alphabet’s third-quarter revenue increased by 16% year-over-year, reaching $102.3 billion, driven by a 34% surge in Google Cloud revenue to $15.2 billion.
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Google Cloud’s operating income rose 85% to $3.6 billion, with a substantial backlog of $155 billion, up 46% year-over-year.
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Alphabet invested $24 billion in capital expenditures during Q3, with projections for full-year 2025 expenditures between $91 billion and $93 billion.
In its third quarter, Alphabet (NASDAQ: GOOGL, GOOG) reported total revenue of $102.3 billion, marking a 16% increase year-over-year. A significant contributor to this growth was Google Cloud, which generated $15.2 billion in revenue, a 34% rise from the previous year, and an operating income that surged 85% to $3.6 billion. Additionally, the cloud segment’s backlog climbed to $155 billion, indicating strong multi-year commitments from customers as they invest in AI workloads.
However, Alphabet’s aggressive spending on AI infrastructure raises concerns about execution risks. The company reported capital expenditures of $24 billion in Q3, with forecasts for 2025 expenditures potentially reaching up to $93 billion. While Alphabet is positioned to enhance its cloud offerings amid growing competition from major players like Microsoft and Amazon, the high investment levels necessitate strong returns to justify future growth.
