Alphabet (NASDAQ:GOOGL), a provider of internet-related services and products, including search, advertising, and cloud computing, closed Thursday at $381.94, up 9.96%. The stock is jumping after fiscal Q1 2026 results topped lofty expectations. Investors are watching to see whether accelerating AI-driven Cloud and Search growth can offset heavy infrastructure capital spending. Trading volume reached 44.5 million shares, about 36% above its three-month average of 32.8 million shares. Alphabet went public in 2004 and has grown 15,231% since going public.
How the markets moved today
The S&P 500 added 1.08% to finish Thursday at 7,213, while the Nasdaq Composite rose 0.89% to close at 24,892. Among large technology rivals, Microsoft closed at $407.78, down 3.93%, while Meta Platforms ended at $611.91, down 8.55%, underscoring mixed sentiment across the broader technology group.
What this means for investors
It was an excellent quarter for Alphabet, as Q1 revenue rose 22% and EPS spiked 81% (largely due to unrealized gains on equity securities), easily outpacing analysts’ expectations. However, two figures stole the show.
First, Alphabet announced that capex would rise to roughly $185 billion in 2026, as the company scaled to meet unprecedented AI demand. On top of this, management said its 2027 capex could “increase significantly” from 2026’s already massive totals.
Second, Google Cloud revenue growth accelerated to 63%, and its backlog nearly doubled sequentially. CEO Sundar Pichai even noted, “We are compute-constrained in the near term … our cloud revenue would have been higher if you were able to meet the demand.” Alongside this stunning growth, the cloud unit’s operating margin rose from 18% to 34% year over year.
To me, this major leap in the company’s Google Cloud operating margins shows it is already seeing a strong ROI on its massive capex outlays. Already a $4 trillion company, I’m not sure just how much bigger Alphabet can get, but I’m more than happy to keep holding my shares for the long haul.
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