Silicon Valley, USA – Google parent company Alphabet has reported record-breaking earnings, with annual revenue surpassing $400 billion (Ksh.51.6 trillion) for the first time since its founding in 1998. The tech giant’s quarterly revenue jumped 18 percent year-on-year, underscoring the strength of its core businesses and its aggressive push into artificial intelligence.
Massive AI and Cloud Investments
Alphabet announced plans to nearly double its capital expenditures in 2026, projecting between $175 billion and $185 billion, compared to 2025 levels. The spending surge reflects the company’s determination to meet soaring demand for AI-powered products and cloud computing services.
Chief Executive Sundar Pichai acknowledged that despite relentless investment in computing infrastructure, demand continues to outpace supply.
“We’ve been supply constrained even as we’ve been ramping up our capacity,” Pichai said during the earnings call.
Alphabet shares dipped slightly, down just over one percent in after-market trading.
Gemini AI Gains Momentum
Google’s flagship Gemini AI platform continues to expand rapidly, ending 2025 with 750 million monthly users, up 100 million from the previous quarter.
Industry analysts predict Google could overtake OpenAI in 2026 as the leading AI provider.
“We expect Google to overtake OpenAI this year for the top spot in AI,” said Emarketer analyst Nate Elliott.
Earnings Breakdown
Alphabet’s fourth-quarter results highlighted strong performance across its divisions:
- Total Q4 revenue: $113.8 billion
- Profit: $34.5 billion
- Cloud computing revenue: $17.7 billion (up 48%)
- Core search and advertising: $82.3 billion (up from $72.5 billion)
- YouTube advertising: $11.4 billion (up from $10.5 billion)
The company also reported 325 million paid subscriptions across consumer services, including Google One and YouTube Premium, further diversifying its revenue streams.
Legal and Regulatory Landscape
Alphabet continues to benefit from a US court ruling that spared it from having to divest its Chrome browser amid monopoly concerns. However, Google has notified the court it will appeal a federal judge’s ruling that it holds an illegal monopoly on online search.
Waymo’s Expansion
Alphabet’s “Other Bets” division posted a $3.6 billion loss on revenues of just $370 million, largely due to investments in autonomous vehicle unit Waymo.
Despite the losses, Waymo raised $16 billion in a funding round that valued the subsidiary at $126 billion, with Alphabet as the majority investor.
Waymo co-CEOs Tekedra Mawakana and Dmitri Dolgov hailed the investment as a milestone for autonomous mobility.
“This infusion of capital will ensure we are positioned to move forward with unprecedented velocity, while maintaining our industry-leading safety standards,” they said in a blog post.
Waymo reported more than 15 million rides in 2025, tripling its annual volume, and now provides over 400,000 rides weekly across six major US metropolitan areas.
Conclusion
Alphabet’s blockbuster earnings highlight the company’s dominance in search, advertising, and cloud computing, while its aggressive AI investments signal its ambition to lead the next wave of technological innovation. With Gemini AI gaining traction and Waymo scaling autonomous mobility, Alphabet is positioning itself as a central player in shaping the future of digital infrastructure and transportation.
