Alphabet Inc., Google's parent company, reported a historic third-quarter revenue of $102.3 billion, surpassing $100 billion for the first time ever. The tech giant's earnings for the quarter, which ended September 30, 2025, increased by 16% compared to last year. This strong performance, driven by significant advancements in artificial intelligence, exceeded Wall Street's expectations.^{[1][2][3][4][5][6]} ### AI Powers Record Financial Results Alphabet's net income for the third quarter surged to $35 billion, a 33% increase from the same period last year. Earnings per share reached $2.87, also beating analyst forecasts. CEO Sundar Pichai highlighted the company's "full stack approach to AI" as a key factor in this widespread business growth.^{[1][2][3][4][7][8][5]} Pichai stated, "Alphabet had a terrific quarter, with double-digit growth across every major part of our business. We delivered our first-ever $100 billion quarter."^[4][5] He added that AI is now "delivering real business results for the entire company."^[9] This robust performance comes as Alphabet continues to heavily invest in AI infrastructure and development.^{[1][2][10][8]} Google's core Search and advertising business remained a powerful revenue driver, generating $56.6 billion, a 15% increase year-over-year.^[1][3][5] YouTube advertising revenue also saw strong growth, reaching $10.3 billion, up 15% from the previous year.^[1][3][5] These segments showed resilience despite concerns that AI chatbots might slow search growth.^[11][6] ### Cloud and Subscriptions Drive Expansion Google Cloud emerged as a major growth engine, with its revenue soaring 34% to $15.2 billion. This surge was fueled by increasing demand for AI-powered infrastructure and generative AI solutions from enterprise customers.^{[1][3][4][5][12]} The cloud division's order backlog also expanded significantly, reaching $155 billion, reflecting long-term commitments from clients.^[2][13][12] Alphabet also reported impressive growth in its subscription services. The company now has over 300 million paid subscriptions across various offerings like Google One and YouTube Premium.^{[3][14][4][13]} The Gemini App, an AI-powered tool, has rapidly gained traction, boasting over 650 million monthly active users, with queries tripling since the second quarter.^{[3][9][13][15]} ### Investing Heavily in AI's Future To support its ambitious AI initiatives and meet growing customer demand, Alphabet announced a significant increase in its capital expenditure forecast for 2025. The company now expects to spend between $91 billion and $93 billion, up from an earlier estimate of $85 billion.^{[1][2][4][5][12]} These massive investments are directed towards expanding data centers and enhancing computing power, including custom AI chips and advanced servers.^{[3][10][8][15]} CFO Anat Ashkenazi confirmed that capital spending would "increase significantly" in 2026, underscoring Alphabet's long-term commitment to leading the AI race.^[9] Pichai emphasized that the company is "investing to meet customer demand and capitalize on the growing opportunities across the company."^[11][8][12] This aggressive spending strategy positions Alphabet to further integrate AI across its products and services.^[1][7][15] While the financial results were overwhelmingly positive, Alphabet also faced a $3.5 billion fine from the European Commission during the quarter. This penalty was for competition law violations related to the company's ad tech business.^[3][4][5] Excluding this fine, the company's operating income would have increased 22%, rather than the reported 9%.^[3][4] Despite regulatory challenges, Alphabet's stock has surged, gaining over 30% since early September. Investors are optimistic about the company's AI-driven growth path and its strong financial fundamentals.^[2][8][6] This record-breaking quarter marks a new era for Google under Sundar Pichai, solidifying its position at the forefront of the global tech landscape, driven by its pervasive AI strategy.^[1][2][15]