Here’s the thing about the Magnificent 7: they’re not so magnificent when earnings season rolls around. But Google? Google just pulled off what the others couldn’t—it actually made money and the market loved it.
While Meta got absolutely demolished (down 11%), Tesla cratered (down 4.6%), and Amazon stumbled (down 3.3%), Alphabet’s stock jumped 5% at the opening bell. Sure, it settled down to a more modest 3% gain by close, but in a market where the Nasdaq was bleeding out, that’s basically a victory lap.
Let’s talk numbers because they’re genuinely impressive. Alphabet just hit its first-ever $100 billion revenue quarter—$102.3 billion to be exact, up 16% year-over-year. That beat analyst expectations. Net income? Up 33% to $35 billion. Earnings per share jumped 35% to $2.87, crushing the $2.28 estimate. This isn’t just beating expectations; this is lapping them.
The real story is Google’s advertising business, which generated $74.2 billion in revenue—a 13% bump. Yeah, search ads are still the cash cow, and they’re still printing money. But here’s what’s actually interesting: Google Cloud is becoming a legitimate powerhouse. Revenue grew 34% to $15.2 billion, and operating income skyrocketed 89% to $3.6 billion. That’s the kind of growth trajectory that gets investors excited about the future.
And speaking of the future, Google Cloud ended the quarter with $155 billion in backlog—up $49 billion from the previous quarter. That’s basically a guarantee of revenue coming down the pipeline. When you’ve got that much committed business, you can sleep pretty well at night.
CEO Sundar Pichai called it a “terrific” quarter, and honestly, he’s not wrong. The company’s full-stack AI approach is working. They’ve got 650 million monthly active users on the Gemini app, and they’re shipping products at speed. AI Overviews and AI Mode in Search rolled out globally faster than anyone expected.
Now, here’s where it gets spicy: Alphabet is cranking up capital expenditures to $91-93 billion in 2025, up from the previous $85 billion estimate. And they’re planning a “significant increase” in 2026. That’s a lot of money to spend on servers and data centers, but the market didn’t freak out. Why? Because investors can see the payoff. Sixty percent of that capex is going to servers, 40% to data center and networking equipment. They’re building the infrastructure to dominate AI.
The only potential headwind? Q4 might see tougher comparisons in Google Advertising because of all the election spending last year. But CFO Anat Ashkenazi expects Google Cloud to keep humming along.
Wall Street noticed. JP Morgan bumped their price target to $340 per share. And at 26 times earnings, Alphabet’s valuation looks reasonable compared to the rest of the Mag 7.
Bottom line: While the other tech giants are struggling to justify their valuations, Google just proved it can actually grow into them. That’s why it’s the only Mag 7 stock that didn’t get punished this earnings season.