Alphabet Defies Skeptics with Rising Revenue and Cloud Growth

Alphabet, the parent company of Google, has been growing its revenue despite bearish predictions that AI would disrupt its core business. The company's CEO, Sundar Pichai, attributes this growth to AI features driving search query growth.

The skeptics' argument is that generative AI would strip clicks out of Google Search and hollow out the ad engine, but instead, AI is boosting the advertising business. Alphabet's revenue grew 17% in Q2 FY2026 to $63.27B, with YouTube ads climbing 13% to $11.06B.

The company's cloud growth has also been impressive, rising 82% YoY to $24.77B. Google Cloud's backlog nearly doubled to over $460 billion in Q1, and nearly 90% of the Fortune 100 use Gemini Enterprise.