Alphabet reports $127.6B Q3 revenue as Google Cloud grows 103% on AI and TPU demand

What Alphabet reported

Alphabet reported third quarter 2026 results on 28 October 2026. Revenue was $127.577 billion, up 25% from $102.346 billion a year earlier and Alphabet's 13th straight quarter of double-digit growth. Operating income rose 30% to $40.576 billion, an operating margin of 31.8%. Net income was $26.2 billion, or $2.12 per diluted share, down from $35.0 billion because other income swung to a loss of $8.2 billion.

Google Services revenue grew 11% to $96.3 billion. Search and other revenue rose 12% to $63.35 billion, and Alphabet says year-over-year Search query growth is the highest in five years. YouTube ads brought in $11.2 billion, and subscriptions, platforms and devices $14.3 billion. Traffic acquisition costs rose to $16.4 billion. Headcount reached 204,757.

Cloud, TPUs and AI usage

Google Cloud revenue more than doubled, up 103% to $30.709 billion, and its operating income rose from $3.6 billion to $11.1 billion. Alphabet credits Google Cloud Platform growth across enterprise AI infrastructure, enterprise AI solutions and core services, and says TPU systems sales were a meaningful contributor. CEO Sundar Pichai said Alphabet is now on a half-trillion dollar revenue run rate.

Pichai said Gemini 4 Argon and Carbon are leading at the frontier, that first-party model APIs now process nearly 32 billion tokens per minute, more than four times a year ago, and that the Gemini app has reached one billion users. Alphabet-level activities, which mainly reflect shared AI research and development, cost $7.7 billion, up from $4.5 billion.

The cost of the build-out

Purchases of property and equipment were $51.355 billion in the quarter, more than double the $23.953 billion a year earlier and above operating cash flow of $42.3 billion. Free cash flow was negative $9.065 billion, the second negative quarter in a row, and $19.7 billion over the trailing twelve months. To fund the spending, Alphabet issued $28.7 billion of senior notes and raised $12.4 billion by selling Class A and Class C shares through its at-the-market program, with $27.6 billion still available.

Why it matters and what to watch

A 103% jump in cloud revenue at this scale shows paying demand for AI compute, including Google's own TPUs, not only internal use. The trade-off is cash: Alphabet is now funding data centers with debt and new shares, much as Meta did with its equity offering this week. The release does not give TPU revenue or a full-year capex range, so the 4:30 p.m. ET earnings call and 10-Q are the next sources. More results are tracked in AI Business & Funding.

Questions people ask

How much did Google Cloud grow in Q3 2026?

Google Cloud revenue rose 103% to $30.709 billion, and its operating income reached $11.121 billion, according to Alphabet's release.

How much is Alphabet spending on AI infrastructure?

Purchases of property and equipment were $51.355 billion in the third quarter of 2026 and $131.953 billion in the first nine months of the year.

How many people use the Gemini app?

Sundar Pichai said the Gemini app has reached one billion users, making it the fastest-growing product in Google's history.

Sources

1. Alphabet Announces Third Quarter 2026 Results (Alphabet Inc. (SEC Form 8-K, Exhibit 99.1), 28 Oct 2026)
2. Alphabet investor relations (Alphabet Inc., 28 Oct 2026)
3. Alphabet Announces Second Quarter 2026 Results (Alphabet Inc. (SEC Form 8-K, Exhibit 99.1), 22 Jul 2026)