The news: Alphabet posted Q1 earnings that topped $109 billion in revenues, its second quarterly results over $100 billion. Gains were largely driven by Google’s cloud division, where revenues were up 63% YoY to $20.0 billion, as well as AI feature launches across various services and its advertising business.

“Our AI investments and full-stack approach are lighting up every part of the business,” Google CEO Sundar Pichai said.

The company’s record-breaking quarterly revenues could help assuage investor concerns about its ability to make up for the $185 billion it plans to spend in capital expenditures this year.

By the numbers:

• Total revenues: $109.90 billion, up 22% YoY—one of the largest revenue growth jumps in its history
• Advertising revenues: $77.25 billion, up 15% YoY
• YouTube revenues: $9.88 billion, up 10.71%
• Cloud revenues: $20.02 billion, up 63% YoY
• Capital expenditures: $35.67 billion, up 107% YoY

Zooming out: The staggering 107% YoY increase in capital expenditures shows just how steep Big Tech’s investment in AI is becoming—and how much pressure Google is under to show the tech can drive revenue growth.

Advertising is one of Google’s most visible proving grounds for AI’s ability to do just that, and its growth suggests its strategy is working. In the past year, the company has released a flurry of AI advertising tools designed to target performance marketers and keep advertisers embedded in its ecosystem throughout the advertising process.

Additionally, Google’s consumer-facing AI features have provided the company with new ad space. Advertising in AI Overviews has expanded, AI Mode is testing ads, and Google SVP of knowledge and information Nick Fox told WIRED it isn’t ruling out bringing ads to Gemini chats. Google also heavily features its own platforms in AI Overviews: A February Tinuiti and Compound study found that YouTube makes up over one-third of AI Overview citations.

Implications for marketers: With OpenAI targeting $100 billion in advertising revenues by 2030, Google will likely face significant pressure to debut more AI-powered ad products and ad space in AI interfaces that don’t yet feature them. Marketers should keep an eye on the potential for ads to come to Gemini, particularly as its user base has grown from 350 million in March 2025 to more than 750 million in March 2026.

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