Alphabet Raises AI Financing as Cloud Growth Accelerates
The Google parent said first-party model APIs processed 19 billion tokens a minute.
Alphabet (GOOGL), the Google parent, reported faster growth across revenue and profit while moving to fund a much larger AI infrastructure buildout.
The quarter marked a sharper turn in Alphabet's investment cycle. The company disclosed a new equity financing that was initially $80 billion and later rose to $84.75 billion, adding to a funding mix that already included substantial debt issuance over the past year.
Revenue rose 22% from a year earlier to about $110 billion, accelerating from 18% growth in the prior quarter and from mid-teens growth earlier in 2025. Earnings per share increased 82% to $5.11, while net income rose 81%, a step-up from the 30% to 33% net-income growth Alphabet posted in the previous two quarters.
Google Cloud provided the clearest operating lift. Cloud revenue rose 63% to $20.0 billion, up from 48% growth in the previous quarter and low-30% growth in the middle of 2025. The backlog also expanded sharply, reaching more than $460 billion after standing at $155 billion at the end of the third quarter of 2025.
Search remained a second engine of the acceleration. Google Search and other revenue grew 19%, up from 17% in the previous quarter, while Alphabet's operating margin widened to 36.1% from 31.6% in the prior quarter.
Consumer and developer AI usage added another layer to the growth profile. Paid subscriptions rose to 350 million, up from more than 325 million in the prior quarter, and Alphabet described the period as its strongest quarter for consumer AI plans. First-party model APIs processed 19 billion tokens a minute, compared with more than 16 billion in the first quarter and 7 billion in the third quarter of 2025.
Alphabet now expects 2026 capital expenditures of $180 billion to $190 billion, above the $175 billion to $185 billion range it gave in the prior quarter and far above the roughly $85 billion target disclosed in mid-2025. The company also said 2027 capital spending should increase significantly from 2026.
The financing plan underscored the scale of that shift. Over the last 12 months, Alphabet generated $174 billion of operating cash flow, raised more than $85 billion of debt across six currencies and markets, and moved to the $84.75 billion equity raise as AI infrastructure became a larger call on capital.
Source: company public filings.