Google parent Alphabet (GOOG, GOOGL) reported its first quarter results on Wednesday, beating on the top and bottom lines, on strong cloud growth.
The company also said it plans to begin selling its custom TPU chips for select third-party customers to install in their own data centers.
Alphabet stock rose more than 3% on the news.
Alphabet stock has climbed roughly 30% over the past six months, beating out Amazon (AMZN), up 15%, and Microsoft (MSFT), which is off about 20%.
Much of that is thanks to the success of Google’s cloud platform and Gemini artificial intelligence models.
For the quarter, Alphabet saw earnings per share (EPS) of $5.11 on revenue of $109.9 billion. Wall Street was anticipating EPS of $2.62 on revenue of $107.1 billion, according to Bloomberg analyst consensus estimates.
Alphabet saw EPS of $2.81 and revenue of $90.23 billion in the same period last year.
The company also said that it is raising its capital expenditures from between $175 billion and $185 billion up to between $180 billion and $190 billion.
Google’s cloud revenue came in at $20.03 billion, versus expectations of $18.4 billion.
The company said Gemini Enterprise grew paid monthly active users 40% quarter over quarter, and that its first-party models are processing more than 16 billion tokens per minute. That’s a 60% increase from the prior quarter.
Alphabet also noted that its Google Cloud backlog nearly doubled in the quarter to more than $460 billion.
Google Advertising revenue topped $77.2 billion. Analysts were projecting $76.2 billion. YouTube advertising revenue was $9.88 billion.
Alphabet’s earnings come after the company announced a number of major AI moves during its Google Cloud Next 2026 conference last week, including two new AI chips: the TPU 8t and TPU 8i.
It also follows an announcement earlier this month that the company entered into an agreement with Anthropic (ANTH.PVT) and Broadcom (AVGO) to provide the AI startup with multiple gigawatts of TPU capacity, with the first raft of processors coming online next year.
The chip moves push Google further into competition with partners Nvidia (NVDA) and AMD (AMD).
In a note to investors, Morgan Stanley analyst Brian Nowak wrote that he doesn’t believe the business is priced into the stock and that it could be a significant driver for the company in 2027.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter at @DanielHowley.
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