Google jumps 6% premarket after strong earnings beat, seen as AI full-stack winner
Investing.com-- Alphabet (NASDAQ: GOOGL) reported first-quarter earnings that significantly exceeded Wall Street expectations, driven by robust Cloud growth and strong Search performance.
The company posted adjusted earnings per share of $5.11, easily beating the analyst consensus of $2.62. Revenue reached $109.9 billion, surpassing the estimate of $106.81 billion and representing a 22% increase YoY, or 19% in constant currency. This marked Alphabet’s 11th consecutive quarter of double-digit growth.
GOOGL shares rose 6% in premarket Thursday trade, reflecting investor enthusiasm for the company’s AI-driven performance across its business segments.
"GOOGL’s incredible position across the entire AI stack is leading to nearly every key business unit posting best-in-4- years growth and margin in early ’26," Barclays analyst Ross Sandler wrote in a note. The analyst bumped the price target on GOOGL to $405 per share.
Google Cloud delivered particularly strong results, with revenue surging 63% to $20 billion, driven by enterprise AI solutions, AI infrastructure, and core Google Cloud Platform services. Cloud segment’s backlog nearly doubled quarter-over-quarter to exceed $460 billion.
Google Services revenue increased 16% to $89.6 billion, with Google Search & other growing 19%, YouTube ads up 11%, and subscriptions, platforms, and devices rising 19%.
"2026 is off to a terrific start. Our AI investments and full stack approach are lighting up every part of the business," said Sundar Pichai, CEO of Alphabet and Google. "Search had a strong quarter with AI experiences driving usage, queries at an all time high, and 19% revenue growth."
Alphabet’s operating margin expanding by 2 percentage points to 36.1%. Net income rose 81%, boosted by a $37.7 billion net gain primarily from unrealized gains on non-marketable equity securities.
Alphabet also reported that total paid subscriptions reached 350 million, with YouTube and Google One as key drivers, while Gemini Enterprise saw 40% quarter-over-quarter growth in paid monthly active users.
The internet titan also announced a 5% dividend increase to $0.22 per share quarterly.