stockrowWhat it does
Alphabet is a collection of businesses whose largest company is Google. It was founded in 2015, is headquartered in Mountain View and is led by Chief Executive Officer Sundar Pichai. Its businesses serve people looking for information and entertainment, advertisers trying to reach customers, and organizations buying computing services.
Google Services includes Search, YouTube, Android, Chrome, Gmail, Google Maps, Google Play, Gemini and Pixel devices. Search helps people find information, while YouTube hosts video and other content from creators. Advertisers pay to reach users on Google’s properties and on partner sites and apps. Consumers can also pay for subscriptions, apps and devices.
Google Cloud sells computing infrastructure, software and AI services to organizations. Customers can use its systems to run applications, analyze data, develop AI models and protect against cybersecurity threats. Its Workspace products provide communication and collaboration tools such as Gmail and Docs.
Alphabet groups its non-Google businesses in Other Bets. These include Waymo, which provides paid autonomous ride-hailing services, and Isomorphic Labs, which applies AI to drug discovery. Alphabet also carries out shared AI research and develops models used across its businesses. Its infrastructure includes specialized chips called Tensor Processing Units, or TPUs, which it uses internally and offers to Cloud customers.
How it makes money
Alphabet generated $402.8 billion in revenue in 2025 and $127.6 billion in Q3 2026.
Google Services earns most of its revenue from advertising. Ads appear alongside Search results and on other Google properties, on YouTube, and on sites and apps belonging to Google Network partners. 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. Search advertising includes revenue from traffic brought in by distribution partners that make Google their default search service.
Google Services also earns subscription revenue from YouTube services and Google One. Google Play generates revenue from app and in-app purchases, while Pixel devices generate hardware sales. Subscriptions provide an ongoing payment relationship; app purchases and device sales depend on customer transactions.
Google Cloud primarily charges consumption-based fees and subscriptions. Customers pay for infrastructure and platform services through Google Cloud Platform, and for Workspace subscriptions that include tools such as Gmail, Docs, Drive and Meet. Cloud also sells AI infrastructure, development tools, security and data services. TPU system sales contributed to Cloud revenue in Q3 2026. Alphabet says it builds system inventory after signing customer agreements, then delivers and bills for the systems.
Other Bets revenue comes primarily from autonomous transportation and internet services. Alphabet says revenue from cloud, consumer subscriptions, platforms and devices has grown over time and expects those sources to become a larger percentage of consolidated revenue. Their margins vary and are generally lower than advertising margins.
Customers and how it sells
Alphabet serves consumers, advertisers, publishers, content creators, developers and organizations buying cloud services. Advertisers use Google’s tools to reach users across devices and formats; publishers and creators distribute content and can earn advertising revenue through Google’s platforms. Google Play connects developers with people buying apps and in-app products, while YouTube offers subscriptions as well as advertising-supported content.
Cloud customers include AI labs, financial institutions, traditional enterprises and public-sector service providers. Alphabet names BNP Paribas as a Gemini Enterprise customer and says Apple uses its TPU infrastructure. It has also partnered with Crux AI and Oracle to deliver TPU systems. Customers can use Cloud infrastructure in Google’s facilities, at the edge or in their own data centers.
Google Services products are used around the world, and YouTube Music and Premium have surpassed 150 million subscribers globally, including trials. Waymo operates in 15 major U.S. cities and has opened public service in San Antonio, San Diego and Tampa. It plans expansion into Canada, Germany, Singapore and Spain.
Alphabet’s international operations face different legal requirements, currencies and market conditions. Changes in exchange rates and advertiser, consumer and enterprise spending can affect revenue.
Suppliers and costs
Alphabet’s costs include traffic acquisition payments to distribution and Google Network partners, content acquisition costs, infrastructure expenses, employee compensation, research and development, sales and marketing, and administrative costs. Traffic acquisition payments are affected by partner agreements, device and geographic mix, and the share of queries coming through paid access points.
Its technical infrastructure uses both custom TPUs and GPUs, including NVIDIA GPUs. Alphabet also works with outside companies for specialized services and temporary staffing. For TPU systems sold to customers, it procures components and builds inventory after contracts are signed; cash goes out before systems are delivered and billed.
Alphabet expects its investment in technical infrastructure to increase significantly in 2027. It also expects higher depreciation and data-center operating costs, including energy, as it expands infrastructure. Its full year 2026 capital expenditure guidance was $195 billion to $205 billion.
At the end of Q3 2026, Alphabet had future purchase commitments of $924 billion and pre-commencement leases and other obligations of $152 billion. The amounts represent maximum contractual obligations; Alphabet says variable pricing and volume flexibility in some agreements could result in lower spending.
- 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 products, hardware and workplace software. In search, alternatives include general-purpose search engines and services focused on particular subjects, such as travel or shopping. Advertisers can use other online platforms or offline media, while users can turn to social networks for referrals.
It was reported on 28 October 2026 that AI assistants from rivals, including Meta’s Muse personal agent, offer users alternatives to asking Google questions. Alphabet also competes with Apple in several areas, while working with it on AI models. In cloud and AI, Alphabet faces other enterprise cloud providers and developers of AI models and services.
Our reading: Search and YouTube’s large audiences and relationships with advertisers and content providers support Alphabet’s competitive position, but users can switch to other services and advertisers can spend across different media.
Our reading: Alphabet’s combination of infrastructure, custom chips, models and widely used products gives it several ways to develop and distribute AI services. That advantage depends on continued investment and on customers choosing its offerings amid competition from other AI and cloud providers.
Our reading: Distribution partnerships and products such as Android and Chrome can help bring users to Google services, though paid access and partner terms also create costs and dependencies.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Meta Platforms | AI assistants and information queries | High |
| Apple | Products and platforms across several areas | Medium |
Growth opportunities
Alphabet is incorporating generative AI into Search, the Gemini app, YouTube and other products. AI Mode lets users ask more nuanced questions, while AI Overviews provides responses within Search. Alphabet says AI investments are driving increased Search usage and query growth, including commercial queries. It is also expanding AI Mode advertising into international markets.
In Cloud, Alphabet is investing in infrastructure and services for organizations that train and use AI models. Google Cloud revenue grew 103% to $30.7 billion in Q3 2026, with growth in AI infrastructure, AI solutions and core Google Cloud Platform. TPU system sales were also a contributor. Alphabet expects those sales to continue scaling in Q4, followed by a meaningful revenue ramp in 2027.
Alphabet is bringing more computing capacity online and offering TPU systems in customers’ data centers and through other providers. It has also introduced Gemini Enterprise agents for business workflows and is developing agent experiences across consumer products.
Beyond Google, Waymo is expanding its autonomous ride-hailing operations. Alphabet continues to invest in other businesses and technologies, including AI for drug discovery and quantum computing. It expects revenue beyond advertising to become a larger percentage of its consolidated revenue, although it says those businesses generally have lower margins than advertising.
- $257.6BFY2021
- $282.8BFY2022
- $307.4BFY2023
- $350.0BFY2024
- $402.8BFY2025
Structural risks
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Advertising and competition: Alphabet generates a significant portion of revenue from advertising. Changes in advertiser spending, competition, user preferences or advertising formats can affect that revenue. Competitors offer alternatives across search, online advertising and AI services.
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AI monetization: Alphabet says its AI products may be monetized differently from historical offerings, affecting revenue growth and margins. It says growth in AI Mode queries had an impact because of lower monetization in AI Mode.
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Infrastructure and cash flow: AI requires computing capacity, equipment and energy. Alphabet expects higher depreciation and data-center costs, and says infrastructure investment and TPU inventory buildup will put pressure on free cash flow. It also expects near-term Cloud margin headwinds from using third-party computing capacity.
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Regulation and legal exposure: Alphabet faces changing laws, investigations and lawsuits across subjects including competition, privacy, security and AI. Compliance can raise costs, require product or business-model changes, or limit services and practices.
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AI development and international operations: Issues in developing or using AI may cause reputational harm and liability. Separately, tariffs, export controls, geopolitical tensions and other barriers can increase costs, restrict components or limit operations in some jurisdictions.
Leadership
Alphabet has multiple classes of stock: 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 a growing Cloud business and earlier-stage ventures. [item1, item7]
Our reading: Its reach gives it multiple ways to deploy and sell AI, but the business must turn that usage into revenue while funding infrastructure and managing competition, regulation and the costs of serving AI products. [item7, call_prepared, facts]