CEO Sundar Pichai Just Delivered Incredible News For Alphabet (GOOGL) Investors

Key Points:

• Alphabet reported a strong first quarter with 22% year-over-year revenue growth to $110 billion, surpassing analyst expectations and marking its 11th consecutive quarter of double-digit growth.
• Google Cloud revenue surged 63% to $20 billion, with operating margins expanding significantly, driven by unprecedented demand and a nearly doubled backlog of $462 billion expected to convert to revenue over the next 24 months.
• The company’s AI chip business, including new Tensor Processing Units (TPU 8t and TPU 8i), is creating a new revenue stream, with strong demand leading to sales to select customers and inclusion in Google Cloud’s backlog.
• Alphabet increased its capital expenditure forecast for 2026 to $180-$190 billion to support growth, and raised its quarterly dividend by 5% to $0.22 per share, reflecting confidence in future earnings despite a modest yield.
• With a current valuation of 28 times next year’s expected earnings and strong performance across advertising, cloud, and AI segments, Alphabet stock remains reasonably priced and is considered a buy.