Alphabet is delivering strong profitability alongside AI growth, with Q1 2026 operating income up 29.7% year-over-year and Google Cloud growing 63%. Unlike unprofitable AI startups, Alphabet generates healthy profits from its core search and video businesses while expanding AI offerings like Gemini Enterprise and autonomous vehicles through Waymo. This combination of current earnings and future AI opportunity makes it a candidate for long-term buy-and-hold investors seeking stable exposure to artificial intelligence.
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Alphabet reported $39.7 billion（約6.4兆円） in operating income in Q1 2026, a 29.7% year-over-year improvement. Google Cloud posted 63% year-over-year growth, while Gemini Enterprise saw 40% sequential growth in paid monthly active users. Waymo surpassed 500,000 fully autonomous rides per week.
Why it matters
Unlike smaller AI startups that burn through cash, Alphabet is generating substantial profits while expanding in AI. Its existing search and video businesses remain strong, with Google Services revenue up 16% year-over-year. Google Cloud has become vital to enterprise AI infrastructure, showing Alphabet is realizing positive returns on its AI investments. For investors seeking a stable, profitable company with AI exposure, this demonstrates Alphabet can deliver both growth and cash generation.
What to watch
Alphabet raised $84.75 billion（約14兆円） in equity capital designed to expand AI infrastructure and compute. The company's P/E ratio of 25.5 is lower than the S&P 500's despite faster growth, and shares are down almost 20% from all-time highs.
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