TLDR
- Alphabet posted Q1 EPS of $5.11, crushing the $2.63 analyst estimate, with revenue of $109.9B — up 22% year-over-year
- Google Cloud revenue surged 63% to $20B, with its backlog nearly doubling to over $460B
- GOOGL stock jumped nearly 10% on Thursday following the results
- Scotiabank raised its price target to $450, implying ~30% upside; Barclays set a target of $405
- Alphabet raised its quarterly dividend by 5% to $0.22 per share
Alphabet reported Q1 2026 earnings on Thursday that blew past Wall Street expectations, sending GOOGL stock up nearly 10% — from an opening price of $347.31 to around $383.69 by midday.
Adjusted EPS came in at $5.11, nearly double the consensus estimate of $2.63. Revenue hit $109.9 billion, topping forecasts of $106.81 billion and marking 22% year-over-year growth.
This was Alphabet’s 11th straight quarter of double-digit revenue growth.
Google Cloud Leads the Way
Google Cloud was the standout performer. Revenue jumped 63% to $20 billion, driven by enterprise AI solutions and core cloud platform services.
The Cloud segment’s backlog nearly doubled quarter-over-quarter, now exceeding $460 billion. CEO Sundar Pichai credited AI tools for large businesses as the main growth driver for Cloud.
Google Services revenue rose 16% to $89.6 billion. Search grew 19%, YouTube ads were up 11%, and subscriptions, platforms, and devices climbed 19%.
Operating margin expanded two percentage points to 36.1%. Net income rose 81%, boosted in part by a $37.7 billion gain from unrealized equity securities.
Total paid subscriptions reached 350 million. Gemini Enterprise saw 40% quarter-over-quarter growth in paid monthly active users.
Analyst Reaction and Price Targets
Scotiabank raised its price target from $400 to $450 following the results, maintaining a “sector outperform” rating. That implies roughly 30% upside from pre-earnings levels.
Barclays analyst Ross Sandler bumped his target to $405, writing that Alphabet’s position across the AI stack is driving best-in-four-years growth across nearly every business unit.
The consensus rating across analysts is “Buy,” with an average target price of $355.07. Seven analysts have issued Strong Buy ratings and 29 have issued Buy ratings.
Wells Fargo upgraded GOOGL to “strong-buy” back in February. JPMorgan lifted its target to $395 with an “overweight” rating.
Alphabet also announced a 5% dividend increase to $0.22 per share quarterly.
Risks Still on the Table
Not everything is clean. Regulators in Switzerland opened a probe into alleged keyword-bidding practices, and the EU is shifting oversight rules toward cloud and AI services.
Insider selling has been active. CEO Sundar Pichai sold 32,500 shares in February at $335.18 each, a 1.47% reduction in his stake. Director John Hennessy also trimmed his position in March.
Heavy AI capital spending and reported cloud capacity constraints could pressure margins going forward.
Employee pushback over Pentagon and classified AI contracts has also created some reputational risk for the company.
The Scotiabank price target of $450 was set on April 30, 2026, the same day Alphabet reported its Q1 results.
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