Alphabet, the parent company of Google, announced on Wednesday that its annual revenue surpassed $400 billion for the first time, marking a milestone in the company’s history since its founding in 1998 by Larry Page and Sergey Brin.
The tech giant reported an 18% year-on-year increase in quarterly revenue, driven by strong demand for cloud computing and artificial intelligence services.
Despite the surge, Alphabet said it will nearly double its capital expenditures in 2026 to meet growing customer demand for AI products.
Alphabet expects to spend between $175 billion and $185 billion this year, double its 2025 investment levels. Chief executive Sundar Pichai acknowledged that demand continues to outpace supply.
“We’ve been supply constrained even as we’ve been ramping up our capacity,” Pichai said during the earnings call.
Shares of Alphabet dipped slightly more than 1% in after-market trading following the announcement.
Gemini AI Growth
Google’s Gemini AI platform continued rapid expansion, ending 2025 with 750 million monthly users, an increase of 100 million from the previous quarter.
“We expect Google to overtake OpenAI this year for the top spot in AI,” said Emarketer analyst Nate Elliott.
Alphabet earned $113.8 billion in the final quarter of 2025, with profits reaching $34.5 billion. Cloud computing revenue soared 48% to $17.7 billion, while Google’s core search and advertising business generated $82.3 billion, up from $72.5 billion a year earlier.
YouTube advertising also grew, rising to $11.4 billion from $10.5 billion. Alphabet now counts 325 million paid subscriptions across services such as Google One and YouTube Premium.
Alphabet continues to benefit from a U.S. court ruling last year that spared it from selling off its Chrome browser in a monopoly case. However, Google has notified the court it will appeal a federal judge’s ruling that it holds an illegal monopoly on online search.
Meanwhile, Alphabet’s “Other Bets” division, which includes autonomous vehicle unit Waymo, posted a loss of $3.6 billion on revenues of just $370 million.
Waymo announced it raised $16 billion in a funding round that valued the company at $126 billion, with Alphabet as the majority investor.
Waymo co-chief executives Tekedra Mawakana and Dmitri Dolgov said in a blog post: “This infusion of capital will ensure we are positioned to move forward with unprecedented velocity, while maintaining our industry-leading safety standards.”
The company reported more than 15 million rides last year, tripling its annual volume, and now provides over 400,000 weekly rides across six major U.S. metropolitan areas.
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