Google results paint picture of an internet powerhouse
Google’s latest quarterly report offers more evidence that its internet empire is resisting the AI shakeup in another potential boon for the company.
The figures, released on Wednesday US time, marked Google’s third consecutive quarter of digital ad growth of more than 10 percent from a year earlier, while also posting sales growth of more than 30 percent at its division that powers data centers for artificial intelligence services.
These gains in the October-December period caused Google’s corporate parent Alphabet Inc to far exceed stock analysts’ earnings estimates.
Alphabet’s fourth-quarter profits rose 30 percent from the previous year to $34.5 billion ($49.4 billion), or $2.82 ($4.04) per share, while revenue rose 18 percent to $113.8 billion ($162.8 billion).
The collective momentum of Google’s core business in search and advertising and the nascent field of artificial intelligence shows that a company born during the internet boom of the late 1990s grew even stronger during another tech phenomenon almost 30 years later.
“As AI continues to expand, search is used more than ever before,” said Alphabet CEO Sundar Pichai.
Google’s successful evolution has helped Alphabet’s stock price soar almost 60 percent in the past five months, giving it a market capitalization of US$4 (A5.7) trillion.
While the company’s shares fell one percent in extended trading following the report, this may have raised the bar for Alphabet to impress investors.
Apple, currently valued at $US4 ($5.7) trillion, is so committed to Google’s AI that the iPhone maker recently struck a deal to use Google’s Gemini technology in a long-delayed upgrade to its virtual assistant Siri.
Google is also embedding more of its Gemini AI into its long-dominant search engine Gmail and Chrome browser as it tries to avoid being outdone and complacent by up-and-comers like OpenAI, Anthropic and Perplexity.
To meet this challenge, Alphabet is on a spending spree to expand its AI capacity.
After spending US$91 billion ($130 billion) on capital expenditures in 2025, mostly devoted to artificial intelligence, the California company is expected to spend even more in 2026.
The capex budget has risen from around US$30 billion ($43 billion) annually since 2022, when OpenAI launched its ChatGPT chatbot to critical acclaim, leaving Google doing everything it can to catch up.
Alphabet’s projected budget for capital expenditures represents nearly half of its 2025 revenue of US$403 billion ($577 billion), said Ethan Feller, equity strategist at Zacks Investment Research. It’s a “staggering” commitment.
But Investing.com’s Thomas Monteiro said last quarter “supports the view that Google is spending to strengthen and differentiate, not to stay relevant.”
Google’s booming digital advertising business is helping fund the craze. Digital ad sales reached US$82.3 billion ($117.8 billion) in the fourth quarter, up 14% from a year earlier.
Google Cloud, which oversees the data centers behind many AI services, had revenue of US$17.7 billion ($25.3 billion), up 48 percent.
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