Google Cloud is becoming Alphabet’s growth engine

Alphabet beat revenue expectations in Q1, helped by a cloud business that is scaling quickly and becoming far more profitable.
Google Cloud revenue surged 63% to $20B, well ahead of estimates, while operating income climbed to $6.6B.
Management said enterprise AI became the primary growth driver for cloud for the first time.
Demand is so strong that the company said cloud revenue would have been even higher if it had enough compute capacity.
That demand is forcing Alphabet to spend aggressively.
The company bumped its 2026 CapEx outlook to $180B to $190B and expects another significant increase in 2027.