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Alphabet (GOOG) crushed Q3 EPS and revenue expectations with revenue growth accelerating to nearly 16% -- its strongest pace since 1Q22 -- and for the first time surpassed the $100 bln quarterly revenue milestone. The robust results were powered by ongoing AI adoption, a resurgence in core ad businesses, and a major cloud acceleration, though management highlighted ongoing cost headwinds and expanded investment in proprietary silicon and data center infrastructure.

• Google Cloud revenue jumped 34% to $15.2 bln, with backlog up 46% to $155 bln as AI services drove growth. Management noted more billion-dollar deals in the first nine months of 2025 than the previous two years combined.
• The growth in Google Cloud was driven by strong momentum in Google Cloud Platform and rapid enterprise AI adoption.
• Search revenue rose 14.5% to $56.7 bln, boosted by AI Overviews and Mode expanding query growth and monetization.
• These new AI-driven Search features are expanding user engagement, commercial query growth, and monetization opportunities, while new AI-powered products like AI Max are broadening advertiser reach.
• YouTube TV, Premium, and Shorts continued strong growth, with U.S. Shorts monetization now ahead of traditional videos.
• FY25 capex guidance was raised to $91-$93 bln (+75% yr/yr) from $85.0 bln for more cloud and AI infrastructure. GOOG expects 2026 capex will be even higher as it expands data center capacity and rolls out next-generation silicon.
• Proprietary silicon, particularly GOOG’s TPU (Tensor Processing Unit) family, remains a key strategic focus and differentiator. The company is scaling its latest TPUs for both internal and cloud infrastructure use, positioning GOOG as the only hyperscaler offering both its own AI accelerators and industry-standard GPUs.

Briefing.com Analyst Insight:

GOOG’s Q3 once again validated its transformation into an AI-first, full-stack technology giant, leveraging both proprietary models and silicon to drive rapid, diversified revenue growth. Though elevated expenses and the EU legal charge clipped margins, GOOG’s twin engine of “AI-first ad/search monetization” and “enterprise cloud/AI acceleration” looks structurally sustainable. The aggressive capital cycle, powered by in-house TPU innovation and global data center buildout, supports long-term competitive advantages. Still, surging costs will require investors to monitor execution discipline, but GOOG’s scale, self-developed chip IP, and entrenched cloud/customer footprint justify optimism.