Google’s parent company, Alphabet, has reported more than $400 billion (£293.7bn) in annual revenue for the first time, with soaring profits across its Cloud unit and YouTube lifting the tech giant above Wall Street expectations.

Publishing its Q4 results, the company revealed final quarter revenues climbed 18% to $113.8bn, leading to profits of $34.5bn over the last three months of 2025, up 30% on last year.

Among the top-line results were a 48% spike in Google Cloud revenue to $17.7bn and an annual run rate of over $70bn, which it attributed to rising demand across the Google Cloud Platform, including enterprise AI infrastructure and solutions.

According to the report, Google now claims more than 325 million paying subscribers, led by strong adoption for Google One and YouTube Premium. That pushed YouTube’s revenues across ads and subscriptions reach more than $60bn over 2025, though the platform fell slightly short of analysts’ forecasts over the final quarter, hitting $11.38bn. 

Across its core business, Alphabet delivered big gains, with Google subscriptions, platforms, and device revenues climbing more than 16% YoY, while Search revenues surged past $63bn, up from $54bn in the same quarter last year, up 17%.

However, market watchers were most interested in the tech firm’s AI gains following the launch of flagship products like AI Overviews and first-party models like Gemini, which now processes over 10 billion tokens per minute.

Over Q4, Google said that revenue from products built on these genAI models grew nearly 400% year-over-year, with the firm shifting more than 8 million paid seats for Gemini Enterprise to over 2,800 companies.

The company also said that its Cloud business, which handles much of the firm’s AI infrastructure and enterprise AI offerings, saw its backlog rise to $240 billion, more than doubling year-over-year, with existing customers outpacing their initial commitments by over 30%.

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Nearly 75% of Google Cloud customers are now using the firm’s AI, everything from its chips and primary LLMs like Gemini, to its AI platforms and enterprise AI agents.

But while taking the lead is one matter, keeping it is another. To stay ahead in the AI race, Alphabet said that it expected its 2026 capex investments to land between $175 to $185 billion. 

That puts anticipated spending well above analyst expectations of roughly $115 billion, and dwarfs Microsoft’s reported $37.5 billion capex spending over 2025, which recently spooked investors. In an earnings call, Alphabet’s chief exec, Sundar Pichai, explained the unexpected spending plans as the firm playing the long game and having “an eye towards the future”, though still expects supply constraints to impact the coming year.