Google's quarterly results paint a picture of an internet powerhouse
getting stronger in AI age
[February 05, 2026] By
MICHAEL LIEDTKE
SAN FRANCISCO (AP) — Google’s latest quarterly report provided further
evidence that its internet empire is withstanding an artificial
intelligence shakeup that’s turning into another potential boon for the
company.
The numbers released Wednesday marked Google's third consecutive quarter
of digital ad growth of more than 10% from the previous year, while also
posting more than 30% sales growth in its division that powers data
centers for AI services.
Those increases during the October-December period propelled Google’s
corporate parent Alphabet Inc. well past the earnings forecasts of stock
market analysts.
Alphabet’s fourth-quarter profit rose 30% from the prior year to $34.5
billion, or $2.82 per share, while revenue climbed 18% to $113.8
billion.
The collective momentum of Google’s main business in search and
advertising and the still-nascent AI field indicates a company born
during the late 1990s internet boom is becoming even stronger during
another technology phenomenon nearly 30 years later.
“Search saw more usage than ever before, with AI continuing to drive an
expansionary moment," Alphabet CEO Sundar Pichai said.
Google’s successful evolution has helped drive up Alphabet’s stock price
nearly 60% in the past five months, giving it a $4 trillion market
value. Even so, some investors are still skeptical whether Google will
be able to sustain enough growth to justify the more than $300 billion
that Alphabet will have spent from 2024 through the end of this year on
expanding the computing capacity needed for AI features. Those worries
caused Alphabet's shares to see-saw between slight gains and declines
during extended trading after Wednesday's report came out.
Apple, also currently worth $4 trillion, thinks so highly of 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 complacency
and being outmaneuvered by up-and-coming companies such as OpenAI,
Anthropic and Perplexity.
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The logo for Alphabet appears on a screen at the Nasdaq MarketSite
in New York, Feb. 14, 2018. (AP Photo/Richard Drew, File)
 To meet the challenge, Alphabet has
been on a spending spree to expand its AI capacity. After pouring
$91 billion into capital expenditures devoted mostly to AI, the
Mountain View, California, company disclosed Wednesday that it
expects to double down by spending another $175 billion to $185
billion this year. Its capital expenditure budget has ballooned from
about $30 billion annually since 2022 when OpenAI released its
ChatGPT chatbot to much acclaim, prompting Google to pull out all
the stops to catch up.
Alphabet's projected budget for capital expenditures represents
nearly half of its 2025 revenue of $403 billion — a “jarring”
commitment, said Ethan Feller, a stock strategist for Zacks
Investment Research.
But the past quarter “supports the view that Google is spending into
strength and differentiation, not spending to stay relevant,” said
Investing.com Thomas Monteiro.
Google's thriving digital ad business is helping to finance the
spending spree. Its digital ad sales totaled $82.3 billion in the
fourth quarter, up 14% from the previous year. Google Cloud, which
oversees the data centers behind many AI services, posted revenue of
$17.7 billion, a 48% increase.
It looked like Google might be facing a potentially huge setback in
2024 when a federal judge condemned its search engine as an illegal
monopoly in a case brought by the U.S. Justice Department. To curb
Google’s abuses, the Justice Department proposed a breakup that
would have required the sale of its Chrome browser.
But U.S. District Judge Amit Mehta rejected that idea and ordered
less severe changes, partly because he believed the rise of AI would
help rein in Google. Both the Justice Department and Google are
appealing that decision.
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