AI Was Supposed to Kill Google Search — Instead It Reignited Growth

Here's What Happened

Alphabet (NASDAQ:GOOG) reported Q1 FY2026 results aft the adjacent connected April 29, 2026, and investors loved what they saw. EPS came successful astatine $5.11 against a $2.63 consensus, gross topped estimates, and shares jumped 6.08% successful aboriginal trading. The header communicative mightiness not person been Search -- the conception AI was expected to termination -- but it outshone adjacent Cloud's monster growth.

AI Pours Gas connected the Search Engine

The carnivore lawsuit connected Google for 2 years was simple: ChatGPT and generative AI would hollow retired Search. The Q1 numbers accidental the opposite. Google Search & different gross deed $60.40 billion, up 19% twelvemonth implicit year, with absorption citing queries astatine all-time highs arsenic AI Overviews and AI Mode pulled users deeper into the product.

Put differently, Search unsocial present generates astir $671.1 cardinal successful gross each azygous day, up from $563.3 cardinal a twelvemonth ago. Google Cloud was technically the prima with 63% maturation and a backlog implicit $460 billion, but Search reaccelerating astatine this standard is the much important communicative shift. I liked it due to the fact that it straight invalidates the loudest portion of the carnivore thesis.

The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks and Google wasn't 1 of them. Get them present FREE.

The Capex Bill Is Coming Due

The lone happening I'd support an oculus connected is cash. Capital expenditures deed $35.67 billion, up 107% twelvemonth implicit year, and escaped currency travel fell to $10.12 billion, down 47%. Google Network gross besides slipped to $6.97 cardinal from $7.26 billion. Net income was flattered by $36.91 cardinal successful unrealized equity gains, truthful bash not anchor to that 81% figure.

Search Carries the Quarter

Key Figures

• Adjusted EPS: $5.11 (vs. $2.63 expected); a 94.1% beat

• Revenue: $109.90B (vs. $107.03B expected); up 21.8% YoY

• Operating Income: $39.70B; up 30% YoY

• Operating Margin: 36.1%, up astir 2 percent points

• Google Cloud Revenue: $20.03B; up 63% YoY

• YouTube Ads: $9.88B; up 11%

• Dividend: raised 5% to $0.22 per share

You should look astatine Search revenue. A 19% maturation people connected a $60 cardinal enactment point is the quiescent breakthrough of this report.

Pichai Leans Into the Full Stack

CEO Sundar Pichai said "2026 is disconnected to a terrific start. Our AI investments and afloat stack attack are lighting up each portion of the business. Search had a beardown 4th with AI experiences driving usage, queries astatine an each clip high, and 19% gross growth." He besides flagged that Gemini is processing much than 16 cardinal tokens per minute, up 60% from past quarter. The code was assured without being promotional.