TLDR
- Alphabet Q1 EPS came in at $5.11, crushing the $2.63 Wall Street estimate
- Revenue hit $110B, up 22% year-over-year, beating the $107B forecast
- Google Cloud revenue surged 63% to $20B with a 33% operating margin
- Cloud backlog nearly doubled to $462B; capex hit $36B in Q1 alone
- GOOGL rose over 7% in after-hours, with KeyBanc lifting its target to $425
Alphabet posted first-quarter results on Wednesday that beat Wall Street expectations across the board, sending the stock up more than 7% in after-hours trading.
EPS came in at $5.11, nearly double the analyst consensus of $2.63, and up from $2.81 a year ago. Revenue reached $109.9 billion, ahead of the $107 billion estimate and 22% higher than Q1 2025.
By Thursday premarket, GOOGL was trading at $372.30, up 6.4%.
$GOOGL | Alphabet Q1’26 Earnings Highlights
🔹 EPS: $5.11 (Est. $2.62-$2.73) 🟢; UP +82% YoY
🔹 Revenue: $109.896B (Est. $106.6B-$107.0B) 🟢; UP +22% YoY
🔹 Operating Income: $39.696B (EBIT Est. $36.3B) 🟢; UP +30% YoY
🔹 Google Cloud Revenue: $20.028B (Est. ~$18B) 🟢; UP +63%… pic.twitter.com/fqg2y2UOga— Wall St Engine (@wallstengine) April 29, 2026
The headline number investors were watching most closely was Google Cloud. Cloud revenue hit $20 billion for the quarter, up 63% year-over-year, with an operating profit margin of 33%. That margin is rising even as depreciation costs climb.
Google Cloud’s backlog nearly doubled from the prior quarter, landing at $462 billion at the end of Q1. That figure gives a strong picture of future revenue that’s already locked in.
AI Spending Accelerates
Alphabet raised its 2026 capex guidance on the earnings call, lifting it from $185 billion to $190 billion. Q1 capex alone hit almost $36 billion, doubling the spend from a year earlier.
CEO Sundar Pichai said on the call that cloud revenue would have been even higher if the company could keep up with demand. CFO Anat Ashkenazi pointed to “unprecedented internal and external demand for AI compute resources.”
Free cash flow fell to $10 billion in the quarter. Alphabet did not buy back stock, compared to $15 billion in buybacks during Q1 2025.
The company raised about $30 billion through debt, pushing long-term debt to $77.5 billion, plus $13 billion in lease liabilities.
Ad Business Stays Strong
Advertising still makes up 70% of Alphabet’s total revenue. Ad sales grew 16% year-over-year, with Search leading the way at 19% growth. This marked the fourth straight quarter of double-digit ad revenue growth.
The third-party ad network continued to shrink, down 4% in the quarter.
Alphabet’s profit for the quarter totaled $62.6 billion, an 81% jump from the same period last year. The company’s market value sits at around $4.2 trillion, up from $1.9 trillion a year ago.
KeyBanc analyst Justin Patterson raised his price target on GOOGL to $425 from $380, keeping an Overweight rating. He said he’s comfortable with the returns from Alphabet’s current investment cycle given the growth rates involved.
Alphabet’s results stood out from the rest of Big Tech. Meta fell roughly 7% in after-hours after outlining an investment plan that spooked investors. Microsoft dipped briefly despite also beating forecasts.
Google Cloud deals with corporate customers and government agencies, including the US military, contributed to the strong cloud figures.
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