Google parent company Alphabet (GOOGL) has delivered fourth-quarter 2025 financial results that beat Wall Street expectations and announced a big increase to its spending on artificial intelligence (A.I.).
The search engine giant reported earnings per share (EPS) of $2.82 U.S., which was ahead of the $2.63 U.S. forecast by analysts.
Revenue in the quarter came in at $113.83 billion U.S., which topped the $111.43 billion U.S. estimated on Wall Street. Sales were up 18% from a year earlier.
Among its important segments, Google Cloud posted revenue of $17.66 billion U.S., which beat the $16.18 billion U.S. consensus view of analysts.
Google Cloud’s revenue was up 48% from a year ago. Google Cloud houses most of the company’s A.I. services and products.
The backlog at Google Cloud increased 55% sequentially and more than doubled year-over-year, reaching $240 billion U.S. at the end of the fourth quarter.
YouTube’s advertising revenue totaled $11.38 billion U.S., which missed forecasts of $11.84 billion U.S.
Total advertising revenue, which includes online search, came in at $82.28 billion U.S., up 13.5% from a year earlier.
In terms of future spending, Alphabet said that it expects 2026 capital expenditures to be in the range of $175 billion U.S. to $185 billion U.S.
The top end of that capital expenditure range would be more than double what the company spent in 2025.
Management said most of the spending this year will go toward investing in A.I. compute capacity for Google DeepMind and to meet “significant cloud customer demand.”
Alphabet CEO Sundar Pichai said on the company’s earnings call that its Gemini A.I. app now has more than 750 million monthly active users, up from 650 million the previous quarter.
GOOGL stock has risen 74% in the last 12 months to trade at $333.04 U.S. per share.
