Google Cloud revenue rose 103%, while Alphabet’s $51.4 billion in quarterly capital spending helped push free cash flow to negative $9.07 billion.

Alphabet’s October 28 results show the cost of building for fast-growing demand for artificial intelligence and cloud services. Investors are weighing whether that growth can eventually generate enough cash to justify the investment.

Cloud growth meets a heavy bill

Google Cloud brought in $30.71 billion in the quarter ended September 30, up 103% from a year earlier. Alphabet said demand for artificial intelligence infrastructure and services helped drive the increase, alongside sales of its tensor processing unit systems.

Cloud operating income also climbed, from $3.6 billion a year earlier to $11.1 billion. The quarter’s key figures show both the growth and the investment burden:

  • Google Cloud revenue: $30.71 billion, up 103% year over year
  • Google Cloud operating income: $11.1 billion, up from $3.6 billion
  • Alphabet capital spending: $51.4 billion
  • Operating cash flow: $42.3 billion
  • Free cash flow: negative $9.07 billion

Alphabet’s filing with the U.S. Securities and Exchange Commission defines free cash flow as a non-GAAP measure of cash remaining after capital expenditures. In the quarter, capital spending exceeded the $42.3 billion generated from operations by about $9.1 billion.

Search still earns more

Google Search and other advertising revenue grew 12% to $63.35 billion. That is more than twice Google Cloud’s quarterly revenue, even as Cloud grew much faster.

Alphabet’s total revenue rose 25% to $127.6 billion. The Associated Press reported that the result fell short of analyst forecasts, as did the advertising result. Search remains the larger revenue engine, but Cloud is becoming a much faster-growing part of the business.

Spending is set to rise further

Alphabet forecast capital spending of $195 billion to $205 billion for 2026. Reuters reported that Chief Financial Officer Anat Ashkenazi told analysts spending is expected to increase significantly in 2027, without giving a figure.

The next test is whether Alphabet can turn new capacity into sustained Cloud growth and profits while its advertising business keeps pace. The latest quarter offers two very different signals: Cloud operating income more than tripled, while investment spending pushed free cash flow into negative territory.