Online advertising giant Alphabet (NASDAQ: GOOGL) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 18% year on year to $113.8 billion. Its GAAP profit of $2.82 per share was 7% above analysts’ consensus estimates.
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Alphabet (GOOGL) Q4 CY2025 Highlights:
- Revenue: $113.8 billion vs analyst estimates of $111.4 billion (2.2% beat)
- Operating Profit (GAAP): $35.93 billion vs analyst estimates of $36.93 billion (2.7% miss)
- EPS (GAAP): $2.82 vs analyst estimates of $2.64 (7% beat)
- Google Search Revenue: $0.03 vs analyst estimates of $61.31 billion (2.9% beat)
- Google Cloud Revenue: $0.08 vs analyst estimates of $16.29 billion (8.5% beat)
- YouTube Revenue: $11.38 billion vs analyst estimates of $11.83 billion (3.8% miss)
- Google Services Operating Profit: $0.05 vs analyst estimates of $38.17 billion (5.1% beat)
- Google Cloud Operating Profit: $0.42 vs analyst estimates of $3.74 billion (42.1% beat)
- Operating Margin: 31.6%, in line with the same quarter last year
- Free Cash Flow Margin: 21.6%, down from 25.7% in the same quarter last year
- Expects 2026 capex to be in the range of $175 to $185 billion, almost double 2025 spend
- Market Capitalization: $4.10 trillion
Revenue Growth
Alphabet shows that fast growth and massive scale can coexist despite conventional wisdom. The company’s revenue base of $182.5 billion five years ago has more than doubled to $402.8 billion in the last year, translating into an incredible 17.2% annualized growth rate.
Alphabet’s growth over the same period was also higher than its big tech peers, Amazon (14.1%), Microsoft (14.8%), and Apple (8.2%). Comparing the four is relevant because investors often pit them against each other to derive their valuations. With these benchmarks in mind, we think Alphabet is a bit expensive (but still worth owning). 
Long-term growth reigns supreme in fundamentals, but for big tech companies, a half-decade historical view may miss emerging trends in AI. Alphabet’s annualized revenue growth of 14.5% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Alphabet reported year-on-year revenue growth of 18%, and its $113.8 billion of revenue exceeded Wall Street’s estimates by 2.2%. Looking ahead, sell-side This projection is admirable for a company of its scale and illustrates the market sees some success for its newer AI-enabling products.
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Google Search: Alphabet’s Bread-and-Butter
The most topical question surrounding Alphabet today is: “Will new Generative-AI products like ChatGPT and Meta AI disrupt Google Search and its 80%+ market share?”.
Although OpenAI (creator of ChatGPT) doesn’t disclose its financials, we can gain further insight by comparing Google Search to Meta and Microsoft’s Bing. Meta essentially has a monopoly in social media advertising and is creeping into search with Meta AI, which is powered by its Llama large language model, while Bing is the distant number two search engine that benefits from its integration with ChatGPT.
Starting with Alphabet, Google Search is by far the most considerable portion of its revenue at 55.7%, and it grew at a 16.6% annualized rate over the last five years, in line with its total revenue. The previous two years saw deceleration as it grew by 13.3% annually, though this isn’t concerning since it’s still expanding quickly.
On the other hand, its two-year result was lower than Meta’s 22.1%, showing digital advertising dollars could be flowing to Meta because of its improved AI algorithms and targeting capabilities. Alphabet bulls would argue this trend could reverse because the return on investment from keyword-driven advertising is more tangible, but that hasn’t been the case lately.
Quarterly performance is particularly relevant for Alphabet because it captures the growth of AI and signals whether investors are overestimating its competitive impact. Bulls can rejoice as Google Search revenue exceeded expectations in Q4, outperforming Wall Street Consensus by 2.9%. The segment recorded a hearty year-on-year increase of 16.7%.
Key Takeaways from Alphabet’s Q4 Results
We enjoyed seeing Alphabet beat analysts’ revenue expectations this quarter. Revenue beats in Google Cloud Platform and Google Search trumped the miss in YouTube. On the other hand, its operating income missed. Additionally, capex guidance for 2026 is nearly double 2025 levels, showing that the company must spend big to win in AI. Overall, this print was mixed, with some topline strength but higher-than-expected spending. The stock remained flat at $332.08 immediately after reporting.
Is Alphabet an attractive investment opportunity right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
