Alphabet (GOOG) recently announced its first quarter results that soared past market expectations. The performance helped the stock climb 10% in the after-hours session. The stock has already climbed nearly 25% so far this year.
Alphabet’s Financials
Alphabet’s revenue grew 20% to $109.9 billion, ahead of analyst estimates of $107.2 billion. EPS of $2.62 was marginally shy of analyst estimates of $2.63.
Among key segments, revenues from Google Services came in at $89.6 billion compared with $77.3 billion a year ago. Google cloud revenues grew 63% to $20 billion compared with the Street’s estimates of $18 billion. The growth in the segment was led by an increase in enterprise AI Solutions and enterprise AI Infrastructure. Google Cloud now has a backlog of $460 billion. Revenues from other bets were down to $411 million from $450 million reported a year ago.
Overall advertising revenues were up 16% to $77.3 billion. YouTube advertising revenues of $9.9 billion missed the Street’s expectations of $10 billion. On the positive note though YouTube subscriptions are growing faster than YouTube ads.
Alphabet continues to invest in building AI infrastructure and capacity and increased its earlier estimated capital expenditure outlay for the year from $175-$185 billion to $180-$190 billion. It incurred $35.7 billion in capex in the first quarter of the year so far.
Alphabet’s AI Expansion
According to the analysts, Google’s robust backlog and performance is a clear result of its full-stack AI growth. And Alphabet just continues to up the ante. At its annual Google I/O developer conference this month, Alphabet release a slew of new AI models and products. It introduced Gemini 3.5 Flash, a faster and more cost-efficient addition to Google’s model family. Gemini 3.5 Flash is being positioned as an AI model that delivers strong performance at significantly lower compute costs. It also announced Omni, a new model designed to simulate physical environments and predict outcomes based on user actions. So far these predictive models that change responses to the environment and the physical world have been studied inside Google DeepMind for robotics and simulation research. The release of Omni suggest that Google is investing in a capability that goes beyond the current chatbot paradigm. Within the agentic front, Google introduced Gemini Spark, a new general-purpose AI agent embedded in the Gemini app. Spark has been designed to reason across connected apps and it can also take actions on the user’s behalf, thus reducing the need for human input. Spark has been launched in beta for Google AI Ultra subscribers.
Analysts believe that by releasing so many AI capabilities, Alphabet is flexing its AI model building capabilities. Recently Anthropic’s latest model, Mythos, was in the news because it had discovered thousands of previously unknown software vulnerabilities. OpenAI’s latest GPT-5.5 has also recently become the default model for ChatGPT. Google’s products are a demonstration of its model capability, agent deployment, and developer tooling all at once.
Google’s stock is trading at $379.38 with a market capitalization of $4.6 trillion. It hit a 52-week high of $404.47 earlier this month and has recovered from the 52-week low of $163.33 from a year ago.
Unlike other tech giants that have announced mass lay-offs, Google has been playing it differently. In the recent quarter, it has not announced big lay-offs, but reports suggest that the company has been quietly reshaping its org structure. The cuts are spread across a performance review process, a voluntary buyout offer, and a flattening of its management layer. Within the last year, Google has laid off more than one-third of its managers overseeing small teams. It has 35% fewer managers, with fewer direct reports.
As of April 2026, the global tech industry has recorded 78,557 layoffs, with 76.7% occurring in U.S. companies. While giants like Oracle (ORCL) (25,000+), Amazon (AMZN) (16,000), and Block (4,000) lead the charge, a disturbing pattern has emerged.
According to research by Alan Cohen (RationalFX), nearly half of these job losses are now explicitly tied to “AI Restructuring.” However, a deeper analysis suggests that AI is often being used as an “AI-as-an-excuse” narrative to justify aggressive cost-cutting and boost sagging stock prices. Companies like Oracle have automated the termination process itself, firing thousands via 6:00 AM emails—a cold-blooded approach that reflects a total deficit of empathy and human kindness.
Comments
Log in or sign up to join the conversation.