Google’s cloud growth is outpacing rivals
The Google Cloud logo is displayed on a high-definition digital monolith at the entrance of the Google pavilion during the Mobile World Congress in Barcelona, Spain, on March 5, 2026. For the 2026 edition, Google Cloud showcases its developments in the ”IQ Era” by unveiling new Agentic AI solutions for telecommunications, powered by the Gemini 3.1 Pro model and Vertex AI Agent Builder. The exhibit highlights the deployment of Google Distributed Cloud running on TPU v6 (Tensor Processing Units) to enable AI at the network edge. Key demonstrations include the ”Network Digital Twin” powered by Spanner Graph and BigQuery, which allows operators like MasOrange and Deutsche Telekom to use autonomous agents for real-time root-cause analysis and predictive network self-healing. The stand emphasizes Google’s unified data foundation, utilizing Graph Neural Networks to transition from traditional monitoring to proactive, intent-based network management. (Photo by Joan Cros/NurPhoto via Getty Images)
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Google is trailing Amazon and Microsoft in cloud computing, but it’s been growing faster.
Second-quarter revenue in Alphabet’s Google Cloud unit, which includes infrastructure and Google Workspace productivity subscriptions, is expected to show 64% growth from a year earlier to $22.24 billion, according to StreetAccount.
That’s an acceleration from 63% expansion in the first quarter, which topped market leader Amazon Web Services’ 28% growth. At Microsoft, revenue from Azure and other cloud services increased 40%.
Large companies are running more apps on Google’s cloud, incorporating the company’s AI models, CEO Sundar Pichai said on the last earnings call in April. Additionally, the Gemini Enterprise assistant for corporate workers, which starts at $21 per person per month, is gaining traction, he said.
Demand for Google’s tensor processing units, or TPUs, is also ramping at AI labs. In April, Google touted a cloud TPU for training AI models and one that handles inference jobs.
The $29.5 billion acquisition earlier this year of cloud security company Wiz is also boosting cloud growth. Google is seeing so much demand that it inked a deal in June with Elon Musk‘s SpaceX, agreeing to pay $920 million a month for AI compute capacity.
— Jordan Novet
Wall Street is focused on AI spending
A general view of the Google Midlothian Data Center on Nov. 14, 2025 in Midlothian, Texas.
Ron Jenkins | Getty Images
Alphabet and its hyperscaler peers are spending boatloads of money on massive data center and related computing projects, and investors are paying close attention.
That puts a particular focus on Alphabet’s capital expenditures, or capex, which has been skyrocketing in recent quarters. In April, the company raised its 2026 capex guidance to between $180 billion and $190 billion, up from $175 billion to $185 billion.
The consensus estimate for Alphabet’s 2026 capex is $187.1 billion, according to FactSet. Among the web giants, Amazon is the only one expected to spend more, with analysts projecting capex of $200 billion, in line with the company’s forecast.
— Jonathan Vanian
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