Google just smashed through the $100 billion quarterly revenue barrier for the first time, sending shares up 4% as the company doubled down on AI infrastructure spending. The blowout Q3 results - $102.35 billion versus $99.89 billion expected - prove the search giant's AI transformation is paying off, with analysts calling it a flawless quarter that solidifies Google's position as an AI leader.
Google just delivered the kind of quarter that makes Wall Street forget all its AI worries. The search giant's parent company Alphabet shattered expectations Thursday with its first-ever $100 billion quarterly revenue, sending shares soaring 4% and proving that its massive AI investments are more than paying off.
The numbers tell the story of a company hitting its stride. Revenue of $102.35 billion crushed analyst estimates of $99.89 billion, while adjusted earnings per share of $3.10 demolished the expected $2.33. But it's what Google is doing with that money that has analysts most excited.
The company just bumped its AI infrastructure spending guidance to $91-$93 billion for the year, up from $85 billion last quarter. CEO Sundar Pichai revealed during the earnings call that Google Cloud alone has a $155 billion backlog - a number that speaks to the explosive demand for AI services.
"Looking out to 2026, we expect a significant increase in CapEx," CFO Anat Ashkenazi told investors Wednesday, essentially telegraphing that Google's AI spending spree is just getting started. That forward guidance sent a clear signal: this isn't a company worried about AI competition, it's a company doubling down to dominate it.
Deutsche Bank analysts said there was "virtually no hair on the print," noting the impressive setup made the beat even more meaningful. The stock had already climbed 43% since Alphabet's Q2 earnings, making this quarter's performance all the more remarkable.
The real validation came from the search business, where critics have been predicting AI-driven disruption for months. Instead, Google's search arm posted $56.56 billion in revenue, up 15% year-over-year. The growth proves that AI isn't cannibalizing search - it's enhancing it.
"The AI search transition has been viewed as the greatest risk to Google, but additional signs that AI search is more opportunity than threat will continue to flip the narrative," JPMorgan analysts wrote in their note. The bank raised its price target to $340 from $300.
