Broad-based Growth
In the third quarter of fiscal 2025, Alphabet’s revenue increased 16%, or 15% in constant currency, year-over-year to $102.3 billion, aided by double-digit growth across key operating segments, including Google Search, YouTube, and Google Cloud. Net income climbed 33% to $35 billion, and earnings per share increased 35% to $2.87 compared to last year. Revenues from the cloud business rose 28%. Revenue topped expectations, continuing the long-term trend of outperformance. In the past three years, quarterly earnings have consistently beaten analysts’ estimates.
“As we scale, we are diversifying revenue. Today, 13 product lines are each at an annual run rate over $1 billion, and we are improving operating margin with highly differentiated products built with our own technology. This deep product differentiation starts with our AI infrastructure. We have a decade of experience building AI Accelerators and today offer the widest array of chips. This leadership is winning customers like HCA Healthcare, LG AI Research, and Macquarie Bank, and it’s why nine of the top ten AI labs choose Google Cloud,” Alphabet’s CEO Sunder Pichai said in the Q3 2025 earnings call.
Futuristic Moves
Alphabet solidified its lead in the generative AI landscape last month with the debut of Gemini 3, a frontier multimodal model that natively processes and generates text, high-fidelity images, audio, and video. More recently, the company announced an agreement to acquire Intersect, a provider of data center and energy infrastructure solutions, for $4.75 billion. The deal is expected to enable more data center and generation capacity to come online, while accelerating energy development and innovation.
Alphabet’s custom AI chips give it a significant edge over other leading AI players, as most of the company’s internal workloads run on those Tensor Processing Units. They are cost-effective and energy-efficient compared to Nvidia’s general-purpose GPUs, which Alphabet’s competitors mostly rely on. Gemini, once considered a laggard among AI models, has emerged as a preferred option, mainly due to its custom AI chip and multimodel capabilities.
Alphabet’s stock has grown more than 85% in the past six months, and is currently trading sharply above its 12-month average value of $209.25.