The Google parent company's total revenue rose 22 per cent to $109.9 billion in the first quarter, above an estimate of $107.2 billion, according to LSEG data.
Shares of the company were up more than seven per cent in extended trading.
Revenue at Google Cloud grew 63 per cent to $US20 billion in the first quarter ended March, well above analysts' average estimate of a 50.1 per cent increase, according to data compiled by LSEG.
That growth rate is the best since the company began breaking out the segment's revenue in 2020, according to LSEG data. Operating income for the cloud unit tripled to $US6.6 billion in the first quarter from $US2.2 billion a year earlier.
Alphabet's overall consolidated operating income increased 30 per cent to $US39.7 billion.
Google began selling its TPU chips, which compete with Nvidia's GPUs, directly to some customers, CEO Sundar Pichai announced on a conference call with analysts.
For years Google reserved its TPUs, which stand for "tensor processing units," only for internal use to develop technologies such as its Gemini AI model. Its decision to lease TPUs to cloud customers helped drive growth for Google Cloud, but the company had held off on directly selling those chips until now.
"Our enterprise AI solutions have become our primary growth driver for Cloud for the first time," Pichai said on the call.
At the same time, its Gemini chatbot drove the "strongest quarter ever" for consumer AI, Pichai said.
He said the company was enjoying growth across the board thanks to its full-stack AI approach, referring to every layer of the AI technology chain including chips, data centres, AI models and developer tools.
In turn, CFO Anat Ashkenazi said Alphabet increased its capital expenditure projection for 2026 to between $US180 billion and $US190 billion, a $US5 billion bump compared to what it announced last quarter.
Capital spending in the first quarter more than doubled from a year earlier to $US35.67 billion.
"Perhaps even more importantly than Alphabet's massive cloud growth pace is the broader justification that the $US180 billion capex plan - that surprised the market last quarter - is well within the company's spending power, considering the durability and quality of the revenue curve shown today," said Thomas Monteiro, a senior analyst at Investing.com.
The third-largest cloud services provider globally, behind Amazon Web Services and Microsoft's Azure, Alphabet has continued to land major deals, including expanded AI infrastructure partnerships with Meta and cybersecurity firm Palo Alto Networks.
The results underscore Alphabet's position as a key beneficiary of global spending on AI, even as investors worry whether massive outlays on infrastructure will translate into sustained growth and market share gains.
