Alphabet’s Q2 Revenue Jumps 24% as AI Powers Google Cloud Growth
The company attributed its performance to strong demand for AI-powered products and services, particularly within Google Cloud, where enterprises are increasingly adopting its AI infrastructure and solutions.
Alphabet, the parent company of Google , delivered a strong second-quarter performance, with revenue increasing 24% year-on-year as artificial intelligence (AI) investments continued to fuel growth across its businesses. The company attributed its performance to strong demand for AI-powered products and services, particularly within Google Cloud, where enterprises are increasingly adopting its AI infrastructure and solutions.
Google Cloud emerged as the standout performer during the quarter, recording an 82% increase in revenue, driven by robust demand for AI infrastructure, AI solutions, and enterprise services. The company’s cloud backlog expanded significantly to $514 billion, reflecting sustained customer demand. Alphabet also revealed that nearly 90% of Fortune 100 companies are now using Gemini Enterprise, underscoring the growing adoption of its generative AI platform among large organizations.
The company said its integrated AI portfolio—including custom chips, AI models, cybersecurity, data analytics, and agent platforms—continues to differentiate Google Cloud in the market. This has enabled Alphabet to more than double its pace of acquiring new cloud customers while existing customers are expanding their AI usage and exceeding their contractual commitments. Transactions through Google Cloud Marketplace also increased more than sevenfold year-on-year, highlighting strong partner-driven growth.
AI also continued to strengthen Google’s core consumer products. Search and Other revenues grew by 17% as users increasingly embraced AI-powered experiences, including AI Overviews and AI Mode, which have now been integrated into a unified search experience. Alphabet reported that AI Mode has surpassed one billion monthly active users globally and is driving higher search query volumes while continuing to generate billions of website clicks each week.
The Gemini ecosystem also recorded strong momentum. Alphabet said more than nine million developers now build applications using its AI models every month, while its APIs process approximately 22 billion tokens per minute, up from 16 billion in the previous quarter. The Gemini app has grown to 950 million monthly active users, with daily active users tripling over the past year as new AI-powered features continue to attract consumers and businesses alike.
Beyond cloud and search, YouTube Ads revenue rose 13% during the quarter, supported by increased user engagement and the rollout of conversational AI features such as Ask YouTube. Alphabet added that its AI investments are extending across its broader portfolio, including cybersecurity, autonomous driving through Waymo, drone deliveries via Wing, and AI-powered drug discovery at Isomorphic Labs, reinforcing its long-term strategy of embedding AI across its businesses.
