Alphabet investors have very publicly worried that the company’s massive AI spending isn’t worth the money. With the company’s latest earnings report, those investors should be able to relax a little.
The takeaway: Google’s cloud business — driven largely by enterprise AI adoption — is booming. The search giant saw Google Cloud revenue spike 82% from where it was this time last year, climbing to $24.8 billion. That’s well above last quarter’s generous year-over-year growth, which showed a revenue jump of 63% to $20 billion — and it also handily beats what Wall Street analysts expected for this quarter’s growth (the expectation was $22.46 billion).
Those cloud gains were driven largely by enterprise AI solutions and enterprise AI infrastructure adoption, the company said, while also noting that its backlog of cloud contracting work — that is work that it hasn’t yet converted into revenue — had climbed to $514 billion.
The company’s profit hit $112.1 billion, which is a massive jump from this time last year, when the company reported $28.1 billion in profit, the company’s earnings report shows. Meanwhile, Alphabet’s overall revenue grew 24% year-over-year during the past quarter to $119.8 billion. The company also saw Google Services revenue jump 15% to $94.5 billion.
