Alphabet Q4 earnings: Annual revenue tops $400 billion for first time, Google parent could double AI spending in 2026

Google parent Alphabet on Wednesday announced its earnings results for the fourth quarter of the ongoing financial year. Alphabet reported a total revenue of $113.8 billion, beating analysts' estimates of $111.43 billion, as per LSEG data.

The company's topline saw a robust growth in its core search business and cloud computing, as it ramped up spending on artificial intelligence.

The overall revenue in 2025 topped $400 billion for the first time, Alphabet said. In the December quarter, its revenue surged 18% year-on-year.

Alphabet reported a profit of $34.5 billion in the recently ended quarter. Profit per share of $2.82 also beat estimates of $2.63, according to LSEG data cited by Reuters.

Alphabet's revenue from cloud computing soared 48% to $17.7 billion, the earnings showed.

Google's core search and advertising business remained the primary revenue driver, generating $82.3 billion, up from $72.5 billion a year earlier.

YouTube advertising revenues also grew strongly to $11.4 billion from $10.5 billion.

Google said it now counts over 325 million paid subscriptions across consumer services, including Google One and YouTube Premium.

Alphabet to ramp up AI spending

The strong earnings come as the Google parent plans to take on the AI landscape by increasing its artificial intelligence spends in the future.

Alphabet said Wednesday that capital expenditure could as much as double this year, in yet another aggressive spending ramp-up by the Google parent as it deepens investments to allay constraints on compute capacity and push ahead in the AI race.

Alphabet, which Larry Page and Sergey Brin co-founded, expects capital expenditures between $175 billion and $185 billion in 2026, double its 2025 spending, to meet surging customer demand for AI products and the need to expand AI infrastructure.

“We are seeing our AI investments and infrastructure drive revenue and growth across the board,” CEO Sundar Pichai said during an earnings call.

Alphabet executives said that investments in AI computing power capacity, including servers, data centres and networking equipment, were key to the company's plans to target the capital expenditure of $175 to $185 billion.

Last year, Alphabet spent around $91 billion on capex.

“We've been supply-constrained, even as we've been ramping up our capacity,” Pichai told analysts and investors during the call.

“Obviously, our capex spend this year is an eye towards the future,” he said, adding that Alphabet expects the capacity constraints to remain through the year.

Google's Gemini AI assistant app now has more than 750 million users per month, Pichai said, up by 100 million compared with November.