Yahoo Finance·2025-11-25 15:43Core Insights - Alphabet achieved a significant milestone by surpassing $100 billion in quarterly revenue for the first time, driven by AI technologies across its Search, YouTube, and Google Cloud businesses [2][7] - The company is experiencing robust growth in its AI capabilities, with a notable increase in monthly active users and queries on its Gemini app, alongside substantial processing of AI tokens [1][10] Financial Performance - In Q3 of fiscal 2025, Alphabet's revenues rose 16% year-over-year to $102.3 billion, marking a historic quarter for the company [2][7] - Google Cloud revenues increased by 34% year-over-year to $15.2 billion, with an operating margin improvement of 6.6 percentage points to 23.7% [11] AI Strategy and Infrastructure - Alphabet's AI infrastructure utilizes a combination of Nvidia's GPUs and its own TPUs, with the latest Ironwood TPU set to launch soon [8][10] - The company is witnessing increased enterprise demand for its AI models, with significant discussions ongoing with Apple regarding licensing its AI model for Siri [9][10] Market Position and Growth Potential - Alphabet's diversified revenue base includes 13 product lines with an annual run rate exceeding $1 billion, positioning it well for future growth [7][16] - The company is expected to see multiple expansion in 2026, driven by its strong Search business and rapidly scaling Google Cloud operations [18] Valuation - Alphabet currently trades at a P/E ratio of 29.6, which is considered conservative compared to Nvidia's 44.3, reflecting its scale and diversified revenue [16] - Management has projected capital expenditures of $91 billion to $93 billion in 2025, indicating a strong commitment to AI and infrastructure investments [17]