GOOGL Stock Soars 7% Following Strong Q1 Earnings Beat

Summary

• Alphabet’s Q1 earnings per share reached $5.11, significantly outperforming the $2.63 anticipated by Wall Street.
• Total revenue climbed to $110 billion, a 22% year-over-year increase that surpassed the $107 billion projection.
• Google Cloud revenue jumped 63% to $20 billion, maintaining a 33% operating margin.
• The Cloud backlog nearly doubled to $462 billion, while capital expenditures for the first quarter alone reached $36 billion.
• GOOGL shares surged more than 7% in late trading, prompting KeyBanc to increase its price target to $425.

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(SeaPRwire) –   Alphabet reported first-quarter earnings on Wednesday that outperformed analyst expectations across all metrics, driving the stock price up by over 7% in after-hours trading.

Alphabet Inc., GOOGL

Earnings per share were $5.11, nearly twice the $2.63 consensus and up from $2.81 in the previous year. Revenue hit $109.9 billion, exceeding the $107 billion forecast and marking a 22% rise from Q1 2025.

By Thursday’s premarket session, GOOGL shares were valued at $372.30, a 6.4% gain.

$GOOGL | Alphabet Q1’26 Financial Summary

EPS: $5.11 (Forecast $2.62-$2.73) ; +82% YoY
Revenue: $109.896B (Forecast $106.6B-$107.0B) ; +22% YoY
Operating Income: $39.696B (EBIT Forecast $36.3B) ; +30% YoY
Google Cloud Revenue: $20.028B (Forecast ~$18B) ; +63%… pic.twitter.com/fqg2y2UOga

— Wall St Engine (@wallstengine) April 29, 2026

Investors focused heavily on Google Cloud, which generated $20 billion in quarterly revenue—a 63% year-over-year jump—with an operating profit margin of 33%. This margin continues to improve despite rising depreciation expenses.

The backlog for Google Cloud nearly doubled from the previous quarter to $462 billion, indicating a substantial amount of secured future revenue.

Increased AI Investment

During the earnings call, Alphabet increased its 2026 capital expenditure guidance from $185 billion to $190 billion. Q1 capex reached nearly $36 billion, twice the amount spent a year ago.

CEO Sundar Pichai noted that cloud revenue could have been higher if the company had the capacity to meet demand. CFO Anat Ashkenazi highlighted “unprecedented” demand for AI computing resources from both internal and external sources.

Free cash flow dropped to $10 billion. Unlike the $15 billion in buybacks during Q1 2025, Alphabet did not repurchase shares this quarter.

The firm raised approximately $30 billion in debt, bringing long-term debt to $77.5 billion, in addition to $13 billion in lease obligations.

Advertising Performance Remains Robust

Advertising remains Alphabet’s primary revenue driver, accounting for 70% of the total. Ad revenue grew 16% year-over-year, led by a 19% increase in Search. This represents the fourth consecutive quarter of double-digit growth in advertising.

The third-party advertising network saw a 4% decline during the quarter.

Alphabet’s quarterly profit reached $62.6 billion, an 81% surge from the prior year. The company’s market capitalization is now approximately $4.2 trillion, up from $1.9 trillion a year ago.

KeyBanc analyst Justin Patterson raised his price target for GOOGL to $425 from $380, maintaining an Overweight rating. He expressed confidence in the returns from Alphabet’s current investment phase given the high growth rates.

Alphabet’s performance was a standout compared to other major tech companies. Meta’s stock fell about 7% in after-hours trading after revealing an investment strategy that concerned shareholders. Microsoft also saw a minor temporary decline despite beating its own projections.

The impressive cloud results were supported by contracts with corporate clients and government agencies, including the United States military.