Alphabet Inc. reported stronger-than-expected third quarter results, driven by robust demand for artificial intelligence (AI) services across its advertising and cloud businesses.
The Google parent company posted total revenue of $102.35 billion, surpassing analysts’ estimates of $99.89 billion, according to LSEG data.
Revenue climbed 16% year-on-year to $102.3 billion.
Alphabet reported a strong July–September quarter, posting a profit of nearly $35 billion, or $2.87 per share, marking a 33% increase from the same period last year.
Alphabet raises capital expenditure forecast again
The Alphabet raised its capital expenditure forecast for 2025 to $91–93 billion, up from $85 billion in July, with the bulk of the spending directed toward expanding data centers that support its growing AI operations.
The company has now raised its spending outlook three times in 2025, after reporting $52.5 billion in 2024. The investment underscores Alphabet’s ambition to maintain a lead in AI infrastructure and data centers.
Google Cloud maintains momentum with 34% revenue growth
Google Cloud continued to be one of Alphabet’s fastest-growing segments, with revenue climbing 34% to $15.16 billion, beating estimates of $14.72 billion.
The growth was fueled by enterprise demand for AI-driven infrastructure, data analytics, and Vertex AI tools, as well as adoption of its custom Tensor Processing Units (TPUs).
The unit continues to close the gap with Microsoft Azure and Amazon Web Services, even as competition intensifies with rivals cutting prices and expanding generative-AI offerings.
Advertising strength eases market concerns
Revenue from Google’s core advertising business jumped 12.6% to $74.18 billion, comfortably above the $71.79 billion forecast.
The strong ad performance helped counter investor fears that AI adoption might erode Google’s search dominance.
AI driving strong momentum, says Sundar Pichai
"Alphabet had a terrific quarter, with double-digit growth across every major part of our business. We delivered our first-ever $100 billion quarter," CEO Sundar Pichai said in a statement.
Pichai added that the company’s bold AI strategy is driving “strong momentum,” citing the rapid global rollout of AI-powered features in Google Search and continued progress with its Gemini AI models.
Alphabet said its workforce totaled about 190,000 employees at the end of September, an increase of more than 8,000 compared with the same period a year ago.