Alphabet Inc. reported a significant boost in its GOOGL prospects due to strong Google Cloud growth, driven largely by the increased demand for AI solutions. In Q1 2026, cloud revenues surged 63% year over year to approximately $20 billion. Revenue from AI-based cloud products skyrocketed nearly 800%, with Google Cloud’s backlog nearly doubling to over $460 billion, indicating sustained enterprise demand for AI infrastructure and services.
Alphabet’s cloud operating income tripled year-over-year to $6.6 billion, resulting in margins expanding to nearly 33%. The company anticipates capital expenditures between $180 billion and $190 billion for 2026, reinforcing its commitment to AI-driven growth. In comparison, Amazon’s AWS revenues grew 28% year-over-year, while Microsoft’s cloud revenues reached $54.5 billion, up 29% year over year, showing intensifying competition in the cloud sector.
Alphabet shares have returned 11.8% year-to-date, outperforming the broader tech sector’s growth of 8%. The Zacks Consensus Estimate for 2026 earnings is pegged at $11.54 per share, reflecting a growth of 6.8% from fiscal 2025.
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