Google Q4 2025 Earnings: A $400 Billion Year and a Massive Bet on AI

Google’s parent company, Alphabet, just reported its Q4 2025 earnings, capping off its biggest year ever with over $400 billion in annual revenue for the first time [1]. Revenue for the quarter was $113.83 billion (up 18% year-over-year), and earnings per share came in at $2.82, both beating what analysts were expecting [2].

The real story, however, isn’t just the record-breaking numbers. It’s the money they’re about to spend. Google announced plans to nearly double its spending in 2026 to accelerate its push into artificial intelligence [3].

The Numbers: Record Revenue, Strong Profits

Revenue: $113.83 billion (up 18% year-over-year)
Net Income: $34.46 billion (up 30% year-over-year)
EPS (Earnings Per Share): $2.82 (beat the $2.63 analysts expected)

Google didn’t just grow—it accelerated. Revenue growth of 18% is faster than the 16% analysts were expecting. Net income grew even faster at 30%, showing that Google is getting more profitable as it scales. For context, this was Google’s first year crossing $400 billion in annual revenue.

Search: Still the Cash Cow

Despite fears of AI disruption, Google’s Search business is stronger than ever. Revenue from Search and other advertising hit roughly $70.9 billion for the quarter, a 17% jump from last year [4]. That’s an acceleration from previous quarters, not a slowdown.

Why the growth?

AI-powered search features are leading to longer, more complex queries
Queries in AI Mode are 3x longer than traditional searches
More engagement is leading to more ad opportunities

Translation: AI isn’t killing Search. It’s making Search better, and Google is monetizing it.

Cloud: The Growth Engine

Google Cloud was the standout performer. Its revenue shot up 48% to $17.7 billion, crushing the $16.18 billion analysts expected [2]. For context, that’s nearly double the growth rate of Search.

The demand is so intense that Google Cloud now has a backlog of contracts worth $240 billion [4]. This isn’t just growth—it’s explosive growth.

YouTube: A Slight Miss

YouTube’s ad revenue grew 9% to $11.4 billion, which was a little shy of the $11.84 billion analysts had penciled in [2]. The company explained this was a tough comparison to the end of 2024, which was flooded with political ad spending during the U.S. elections [2].

What’s Coming in 2026: The AI Spending Spree

Google announced it expects to spend between $175 billion and $185 billion on capital expenditures in 2026. That’s nearly double its 2025 spend [3].

“We’re seeing our AI investments and infrastructure drive revenue and growth across the board,” said CEO Sundar Pichai. “To meet customer demand and capitalize on the growing opportunities ahead of us, our 2026 CapEx investments are anticipated to be in the range of $175 to $185 billion.” [4]

Translation: Google is building the infrastructure—data centers, custom chips (TPUs), and more—to power the next decade of AI, and it’s not afraid to spend big to do it.

The Bottom Line for Investors

Google is firing on all cylinders. The core Search business is accelerating, the Cloud business is exploding, and the company is more profitable than ever. At the same time, it’s investing with the aggression of a startup, pouring a massive amount of capital into building out its AI infrastructure.

If the bet pays off, the massive spending could cement Google’s leadership in AI and fuel another decade of growth. If it doesn’t, the company could find itself burning cash on expensive projects while facing questions about capital discipline. For now, Google is sending a clear message: the future is AI, and they’re building it, no matter the cost.

References

[1] Alphabet Announces Fourth Quarter and Fiscal Year 2025 Results

[2] Alphabet (GOOGL) Q4 2025 earnings

[3] Google to Double Spending as Earnings Beat

[4] Q4 earnings call: Remarks from our CEO