Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) reported a stellar third quarter, achieving its first-ever $100 billion revenue quarter, signaling that the company's aggressive “full stack” approach to AI is now translating into significant financial gains across its core businesses.
Check out GOOG's stock price here.
AI Backlog Explodes To $155 Billion
The standout performer was Google Cloud, which saw its AI-driven backlog surge by an astonishing 46% sequentially to $155 billion.
This monumental increase underscores robust enterprise demand, with CFO Anat Ashkenazi highlighting that Cloud has signed more billion-dollar deals in the first nine months of 2025 than in the previous two years combined
"Cloud had another great quarter of accelerating growth with AI revenue as a key driver," said Sundar Pichai, CEO of Alphabet, emphasizing the direct link between AI adoption and Cloud's success.
Google Search Gets An ‘Expansionary’ AI Boost
Google’s foundational Search business is also experiencing an “expansionary moment” thanks to AI. AI Overviews and AI Mode are actively driving query growth, with AI Mode alone now boasting over 75 million daily active users globally.
Pichai noted, “Our full stack approach to AI is delivering strong momentum and we’re shipping at speed, including the global rollout of AI Overviews and AI Mode in Search in record time.” This growth in user engagement, even for commercial queries, suggests that AI is enhancing, rather than cannibalizing, Google's advertising ecosystem.
The results solidify venture capitalist Chamath Palihapitiya‘s statement that the generative AI race will ultimately be won by established tech incumbents, not new startups, citing their "massive distribution" as the decisive factor. In an X post on Oct. 20, he stated that Google Gemini "has a huge runway ahead of itself as their models and services become better."
YT Shorts Earn More Revenue Per Hour Than Traditional Video
YouTube, another critical segment, reported a 15% increase in advertising revenue, with a significant milestone reached.
YouTube Shorts now generates more revenue per watch hour than traditional in-stream video in the U.S. This addresses prior concerns about short-form content monetization.
Alphabet Raises CapEx, Signaling ‘Significant Increase’ In 2026
To meet the escalating demand for its AI infrastructure and services, Alphabet announced a significant increase in its 2025 capital expenditures to between $91 billion and $93 billion, with a “significant increase” projected for 2026.
This aggressive investment, including scaling NVIDIA GPUs and Google’s own TPUs, demonstrates confidence in the long-term returns from its AI leadership. As Pichai concluded, "Our leadership in AI positions us so well for the opportunity ahead."
GOOG Clocks Over 44% Returns In 2025
Shares of GOOG closed 2.51% higher at $275.17 apiece on Thursday and advanced by 6.73% in after-hours. The stock advanced 44.35% on a year-to-date basis and 56.22% over the year.
It maintains a stronger price trend over the short, medium, and long terms, as per Benzinga’s Edge Stock Rankings, with a poor value ranking. Additional performance details are available here.
On Thursday, the futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were lower.
Meanwhile, on Wednesday, the S&P 500 index slipped 0.0044% to 6,890.59, whereas the Nasdaq 100 index rose 0.41% to 26,119.85. On the other hand, Dow Jones declined 0.16% to end at 47,632.00.
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