Alphabet Inc. (NASDAQ: GOOGL) reported blockbuster financial results for the fourth quarter of 2025, significantly exceeding analyst expectations on both revenue and earnings. The company posted quarterly revenue of $113.83 billion, a 15% year-over-year increase and above the $111.43 billion consensus estimate. Earnings per share came in at $2.82, beating the Wall Street forecast of $2.63.
Net income for the quarter surged to $34.46 billion, up from $26.53 billion in Q4 2024. The company's operating income rose to $35.93 billion, maintaining a steady margin of 32%. For the full year 2025, Alphabet's annual revenue crossed the $400 billion threshold for the first time, reaching $402.84 billion.
AI and Cloud Drive Growth: CEO Sundar Pichai highlighted the pivotal role of the Gemini AI platform in the company's performance. The Gemini app now boasts over 750 million monthly active users, and its API is processing over 10 billion tokens per minute. This AI momentum directly fueled Google Cloud's revenue, which skyrocketed to $17.66 billion in Q4, up from $11.96 billion a year prior. The cloud division's annual run rate now exceeds $70 billion.
Google Search and other services revenue also saw robust growth, rising to $63.07 billion from $54.03 billion. Total advertising revenue across Google platforms increased to $82.28 billion, with YouTube advertising contributing $11.38 billion, slightly below expectations but still higher than the previous year's $10.47 billion.
Aggressive Capex Plans Cause Concern: Despite the strong results, Alphabet's stock experienced a post-earnings dip. This was primarily driven by the company's aggressive capital expenditure guidance for 2026, projected to be between $175 billion and $185 billion—nearly double 2025 levels. Pichai defended the strategy, stating "the risk of under-investing is far greater than the risk of over-investing" in AI infrastructure. Analysts from Jefferies and Raymond James view the investment as building a long-term competitive moat, with Jefferies raising its price target to $400.
Other financial highlights include a full-year net income of $132.17 billion, up from $100.12 billion in 2024. The company's headcount grew to 190,820 employees, while losses in its "Other Bets" segment widened to -$3.62 billion for the quarter.
