Alphabet reports first $100B quarter as it turns its massive AI infrastructure bets into revenue

Core Insights - Alphabet achieved its first hundred billion dollar quarter, with strong performance across all major business lines [1] - The company's AI infrastructure investments are translating into significant revenue growth, with search revenue up 14%, YouTube ads increasing by 15%, and Google Cloud revenue jumping 34% year-over-year [2] Revenue Growth - Search revenue increased by 14%, YouTube ad revenue rose by 15%, and Google Cloud revenue surged by 34% year-over-year, exceeding market expectations [2] - The backlog for Google Cloud reached $155 billion, an increase of nearly 80% from the previous year, indicating strong future revenue potential [3][4] AI and Product Development - AI mode has 75 million daily active users in the US, with usage doubling over the quarter, and Google is testing ads within this mode [3] - Gemini, Google's consumer-facing chatbot, has reached 650 million monthly active users, narrowing the gap with OpenAI [3] Capital Expenditure and Investment Strategy - Alphabet raised its full-year capital expenditure guidance to as much as $93 billion, reflecting its commitment to meet rising AI demand [5] - The number of billion-dollar cloud deals this year has already surpassed the total from the past two years combined, excluding a new contract with Anthropic worth tens of billions [4] Market Performance - Alphabet's stock rose 38% in Q3, marking its largest gain in 20 years, driven by investor confidence in its monetization strategy for AI [8] - Year-to-date, the stock is up 52%, approaching a market value of $3.5 trillion [9]