Alphabet beat Wall Street estimates on revenue and earnings on Wednesday, giving goog stock another boost as investors kept pressing for proof that its cloud and artificial intelligence push is paying off. The company reported first-quarter revenue of $109.9 billion, above the $107.1 billion analysts had expected, and said earnings per share topped forecasts as well.
The quarter also showed where the growth was coming from. Google Cloud revenue reached $20.03 billion, ahead of the $18.4 billion analysts had projected. Google advertising revenue came in at $77.2 billion, above the $76.2 billion expected, while YouTube advertising revenue was $9.88 billion. Alphabet posted EPS of $2.81 in the same quarter last year against revenue of $90.23 billion, underscoring how far the business has moved in a year even as the company continues to lean on ads for most of its sales.
The results land at a moment when investors are watching Google Cloud and Gemini artificial intelligence models for signs that Alphabet can keep pace in the AI race. Last week, the company announced two new AI chips at its Google Cloud Next 2026 conference, the TPU 8t and TPU 8i. Earlier this month, it said it had reached an agreement with Anthropic and Broadcom to provide the AI startup with multiple gigawatts of TPU capacity, with the first processors expected to come online next year.
That chip push matters because it puts Alphabet more directly in competition with partners Nvidia and AMD, even as it tries to build a larger role for its own hardware. One Morgan Stanley analyst said the TPU business does not appear to be priced into the stock and could become a significant driver for the company in 2027. Alphabet shares have climbed roughly 30 percent over the past six months, ahead of Amazon's 15 percent gain and well above Microsoft, which is off about 20 percent over the same stretch.
The question now is not whether Alphabet can still produce a clean earnings beat. It is whether the company can turn cloud growth, custom chips and Gemini momentum into something bigger than another strong quarter, because the market is already starting to price in that possibility.