Alphabet’s Financial Highlights
In the fourth quarter of 2025, Alphabet reported a revenue increase of 18% year over year to $113.8 billion, driven by significant growth in Google Search, which saw revenues rise to $63.1 billion, and Google Cloud, where revenue surged 48% to $17.7 billion. Google Cloud’s operating income more than doubled from $3.6 billion in Q3 2025 to $5.3 billion in Q4 2025, with a backlog increase from $155 billion to $240 billion.
During the same period, Alphabet’s Google Cloud operating income more than doubled year over year, signaling strong performance amid growing interest in AI technologies. CEO Sundar Pichai noted that Google Search experienced its highest usage ever in Q4, with daily AI Mode queries in the U.S. doubling since launch and being three times longer than traditional searches.
Despite a capital expenditure projection for 2026 of $175-$185 billion, Alphabet’s valuation remains lower than that of Nvidia, currently trading at approximately 29 times earnings compared to Nvidia’s 37 times. Analysts suggest that Alphabet’s diverse business model provides a more stable avenue for investing in AI-related growth.
