Google Cloud Soars 63% Leading Tech Giants' Q2 Results, Stock Jumps 7%

Alphabet Inc., Google's parent company, started the year 2026 with an impressive report card. AI-driven, all business lines have accelerated, with revenue and profits far exceeding the same period last year, and cloud business growth as high as 63%.

In the first quarter, Alphabet's total revenue increased by 22% year-on-year to $109.9 billion (analysts expected $107.1 billion), achieving double-digit growth for the 11th consecutive quarter.

Net profit soared by 81% year-on-year to $62.6 billion, with diluted earnings per share reaching $5.11. This includes about $36.9 billion of unrealized gains on non-liquid equity securities, and after excluding this non-recurring item, core operating profitability still recorded significant improvements. Operating profit grew by 30% year-on-year to $39.7 billion, and the operating margin expanded by about 2 percentage points to 36.1%.

CEO Sundar Pichai stated, "AI is illuminating every corner of the business."

Search query volume has reached an all-time high, with search revenue increasing by 19%; the Gemini application-driven consumer AI initiative has created the strongest quarterly performance in history, with the company's total paid subscriptions reaching 350 million; Google Cloud order backlogs have almost doubled quarter-on-quarter to over $460 billion, and Gemini Enterprise Edition paid monthly active users have increased by 40% quarter-on-quarter.

On the capital expenditure front, the company's capital expenditure in the first quarter rose from $17.2 billion in the same period last year to $35.7 billion, while raising about $31.1 billion through the issuance of senior unsecured bonds, and also completed significant acquisitions worth over $33 billion.

The Alphabet board announced a 5% increase in the quarterly dividend to $0.22 per share, payable on June 15th.

After the financial report was released, Alphabet's U.S. stocks rose by 6.63%.

Cloud Business Accelerates Significantly, Order Backlog Nearly Doubles

Google Cloud's revenue in the first quarter was $20 billion, a year-on-year increase of 63%, with the growth rate clearly higher than the same period last year. The company attributes this to the combined drive of corporate AI solutions, corporate AI infrastructure, and core GCP services.

More importantly, the cloud business order backlog nearly doubled quarter-on-quarter to over $460 billion, providing strong visibility support for future revenue recognition.

In terms of profitability, Google Cloud achieved operating profit of $6.6 billion in the first quarter, a significant leap from $2.2 billion in the same period last year, with profitability improving significantly and economies of scale gradually emerging.

Alphabet lists AI R&D-related shared expenses separately as corporate-level activity expenses, with these expenses reaching $5.4 billion in the first quarter, an increase of about 80% from $3 billion in the same period last year, reflecting the company's continued increase in the field of basic AI model R