stockrowWhat it does
Alphabet is a collection of businesses centered on Google. Founded on 2015-10-02 and headquartered in Mountain View, it is led by Chief Executive Officer Sundar Pichai.
Google Services includes Search, YouTube, Android, Chrome, Gmail, Google Play, Gemini and Pixel devices. People use these products to find information, watch video, communicate, use apps and access AI tools. Businesses pay to advertise alongside some of those experiences, while consumers can also buy subscriptions, apps and devices.
Google Cloud sells computing infrastructure, software and AI services to organizations. Customers can use its computing resources to run applications, analyze data, train AI models and protect systems. Its Workspace products provide communication and collaboration tools. Cloud customers can also buy specialized Tensor Processing Unit, or TPU, systems for AI workloads.
Alphabet’s other businesses are grouped as Other Bets. They include Waymo, which provides paid autonomous ride-hailing services, and Isomorphic Labs, which applies AI to drug discovery. Alphabet also conducts shared AI research and model development that supports its businesses.
The company builds its own AI models and incorporates them into products such as Search and Gemini. Its infrastructure uses both its custom TPUs and graphics processing units, or GPUs, to run its own services and support Cloud customers.
How it makes money
Alphabet reports Google Services, Google Cloud and Other Bets as separate segments. Shared AI research and development is reported in Alphabet-level activities rather than allocated to those segments.
Google Services earns revenue primarily from advertising on Search and other Google properties, YouTube and partner properties in the Google Network. Performance advertising is designed to prompt measurable actions, such as clicks, while brand advertising aims to build awareness through formats including video, text and images. Advertisers use Google’s tools to reach users, and Google works with publishers and other content partners that display ads.
Google Services also earns recurring consumer subscription revenue from products including YouTube Music and Premium, YouTube TV and Google One. Google Play generates revenue from app and in-app purchases, while devices revenue includes Pixel sales. Subscription, platform and device revenue can vary with usage, subscriber numbers, demand and product launches.
Google Cloud primarily charges consumption-based fees and subscriptions for infrastructure, platforms, applications and other services. Google Workspace subscriptions cover communication and collaboration tools. Cloud also sells TPU systems that combine hardware, networking and software; Alphabet builds inventory after signing customer agreements and recognizes revenue as systems are delivered.
Other Bets primarily earns revenue from autonomous transportation and internet services. Waymo charges for autonomous rides in cities where it operates.
Alphabet revenue was $402.8 billion in 2025 and $127.6 billion in Q3 2026.
Alphabet expects non-advertising revenue sources to become a larger percentage of consolidated revenue over time. Their margins vary and are generally lower than advertising margins.
Customers and how it sells
Alphabet serves individual users, advertisers, publishers, developers and organizations. Search and YouTube reach people looking for information and entertainment; advertisers pay to reach audiences across Google’s properties and partner sites. Content providers work with Google to earn advertising revenue, while creators participate in programs such as the YouTube Partner Program.
Cloud customers range from enterprises and financial institutions to AI developers. BNP Paribas uses Gemini Enterprise, Tata Steel has deployed AI agents, and Ulta Beauty has built an AI shopping assistant. Alphabet also works with customers that use TPU systems for AI workloads, including Anthropic and Apple. Its Cloud services can run in Google’s cloud, at the edge or in customer data centers.
Alphabet serves users and customers around the world. In Q3 2026, Waymo operated in 15 major U.S. cities and had recently opened public service in San Antonio, San Diego and Tampa. The company planned expansion into Canada, Germany, Singapore and Spain.
Alphabet distributes services through its own products and through partners. Search distribution partners can make Google the default search engine in browsers and other access points; Network partners display advertising on their properties. Alphabet also works with Crux AI and Oracle to deliver TPU systems.
Suppliers and costs
Alphabet’s costs include payments to distribution and Google Network partners, content acquisition, technical infrastructure, employee compensation, research and development, sales and marketing, and administration. Some infrastructure and operating costs are less variable and may not move directly with revenue.
Traffic acquisition costs are payments to distribution and Network partners. Alphabet expects those payments to rise as advertising revenue grows, although the rate is affected by factors including device and geographic mix, partner terms and the share of queries coming through paid access points.
The company uses custom TPUs alongside GPUs in its infrastructure. Its Cloud infrastructure includes NVIDIA GPUs, and it procures components to build TPU systems after signing customer contracts. Alphabet also uses outside companies for specialized services and temporary staffing.
In Q3 2026, hardware costs associated primarily with TPU system sales contributed to higher cost of revenue, along with depreciation, content acquisition and infrastructure operating costs. Capital expenditure was $51.4 billion in the quarter, mostly for technical infrastructure. Alphabet expects increased depreciation and data-center operating costs, including energy, as infrastructure investment grows. It also expects TPU inventory buildup and infrastructure spending to pressure free cash flow.
- Revenue$402.8B
- Cost of revenue−$162.5B
- Research and development−$61.1B
- Selling, general and administrative−$50.2B
- Operating income$129.0B
Competitive position
Alphabet competes across search, advertising, digital content, cloud services, AI, consumer hardware and communication software. Alternatives include general-purpose and specialized search services, online shopping and streaming platforms, social networks, and offline advertising media. Advertisers often use several channels, while users can move to other products and services.
It was reported on 28 October 2026 that Meta’s AI assistant offered users another place to ask questions they might otherwise put to Google. Alphabet also competes with Apple in multiple areas, while working with it on some products.
Competition for advertising depends on attracting users, advertisers and content providers. Alphabet seeks to retain users through useful and secure products, advertisers through results and distribution, and content partners through revenue opportunities and agreement terms. Cloud faces competition from other enterprise providers, while AI model developers and providers compete with Alphabet’s AI offerings.
Our reading: Alphabet’s broad user reach is a substantial competitive asset because it gives advertisers and content partners access to audiences across Search, YouTube and other properties. Our reading: Its shared AI research, models and infrastructure support several businesses, but their advantage depends on continued product development as AI competition grows. Our reading: Distribution agreements help Google reach users, although those agreements also involve traffic acquisition costs and can change over time.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Meta | AI assistants and answers to user questions | High |
| Apple | Multiple business areas | Medium |
Growth opportunities
Alphabet is incorporating AI into consumer products and enterprise services. Search includes AI Overviews and AI Mode, while Gemini models support the Gemini app and Cloud offerings. The company expects engagement with AI products and services to benefit its business, though it may monetize them differently from its historical offerings.
Alphabet is also expanding Cloud infrastructure and AI services. Cloud customers can use its platforms to build applications, work with data and deploy models and agents. In Q3 2026, Google Cloud revenue grew 103% to $30.7 billion, supported by Google Cloud Platform and TPU system sales. Alphabet expects TPU system sales to continue scaling in Q4, followed by a revenue ramp in 2027.
Subscriptions, platforms, devices and Cloud have grown over time. Alphabet expects revenue beyond advertising to become a larger percentage of consolidated revenue. Demand for AI plans in Google One and YouTube subscriptions contributed to subscription, platform and device revenue growth in Q3 2026.
Waymo is expanding its autonomous ride-hailing operations, including planned international markets. Alphabet is also investing in other initiatives, including drug discovery and quantum computing. To support demand and internal research, it plans further investment in servers, networking equipment and data centers; its full year 2026 CapEx guidance range was $195 billion to $205 billion.
- $257.6BFY2021
- $282.8BFY2022
- $307.4BFY2023
- $350.0BFY2024
- $402.8BFY2025
Structural risks
- Advertising dependence: Alphabet generates a significant portion of revenue from advertising. Changes in advertiser spending, competition, user behavior and advertising formats can affect revenue.
- AI monetization and competition: Alphabet may monetize AI services differently from historical offerings. It faces competition from other AI developers, and issues in developing or using AI may cause reputational harm or increase liability.
- Infrastructure spending: AI requires more computing power than historical offerings. Alphabet expects higher depreciation, energy, equipment and network costs, while infrastructure investment and TPU inventory buildup are expected to pressure free cash flow.
- Regulation and legal exposure: Evolving laws and enforcement concerning competition, privacy, AI and other matters can increase costs, limit business practices or require product and business-model changes. Alphabet also faces claims, lawsuits and investigations.
- International operations: Sanctions, tariffs, export controls, geopolitical tensions and other barriers can raise costs, limit demand, disrupt component sourcing or impede operations in particular jurisdictions.
- Cloud capacity: Alphabet is using third-party computing capacity in a supply-constrained environment and expects that capacity to create near-term Cloud margin headwinds.
Leadership
Alphabet has a multi-class voting structure: Class B shares have 10 votes per share, Class A shares have one vote per share, and Class C shares have no voting rights.
| Name | Role | Since | Total pay, FY2025 |
|---|---|---|---|
| Sundar PichaiChief Executive Officer,Alphabet and Google,and Director | — | $10.9 million | |
| Anat AshkenaziSenior | Vice President,Chief Financial Officer,Alphabet and Google, asof July 31, 2024 | — | $31.3 million |
| Ruth M. PoratPresident and ChiefInvestment Officer,Alphabet and Google; | — | $29.1 million | |
| Philipp SchindlerSenior | Vice President,Chief Business Officer,Google | — | $42.2 million |
| Kent WalkerPresident, Global Affairs, | Chief Legal Officer, and Secretary, Alphabet and Google | — | $29.1 million |
Bottom line
Our reading
Our reading: Alphabet combines an advertising business built around widely used consumer services with subscriptions, Cloud and earlier-stage businesses. Our reading: Shared AI models and infrastructure give it ways to serve both consumers and organizations, but AI also brings competition, uncertain monetization and substantial spending. Our reading: The balance between Cloud and TPU demand, infrastructure costs and advertising performance will shape how those investments translate into results.