Google Cloud now supplies more than a fifth of Alphabet's revenue after growing 82% year over year, with CEO Sundar Pichai pointing to a $514 billion backlog on the unit's earnings call. Nearly 90% of Fortune 100 companies use Gemini Enterprise, and cloud computing may be becoming more important than search to Alphabet's future earnings.
Google Cloud generated more than 20% of Alphabet's total revenue last quarter, and Sundar Pichai told investors on the earnings call that the unit's backlog had reached $514 billion. Cloud revenue surged 82% year over year, far outpacing the rest of Alphabet's business. Nearly 90% of Fortune 100 companies now use Gemini Enterprise, Alphabet's AI product for corporate customers, and that adoption is feeding directly into cloud demand.
Cloud's slice of Alphabet keeps growing
Google Cloud made up just 14% of total revenue in Q2 2025; a year later, its share exceeds one-fifth. The unit turned its first profitable quarter in 2023, and its net operating income more than tripled year over year in the latest quarter. By contrast, the Google services segment, mostly online ads, posted a 20% improvement. Alphabet's ad revenue climbed 14% year over year — solid, but dwarfed by cloud's growth. Given the size of the backlog, it's feasible Google Cloud could account for more than a quarter of total revenue next year.
Gaining ground on Amazon and Microsoft
Amazon still holds the largest share of the cloud infrastructure market, at 28% as of its last report. Microsoft is second, at 21%. Google Cloud trails both, but it's closing the gap: Alphabet's market share reached 14%, up from 12% as of Q4 2025. Its growth rate exceeds the other two, so if current trends hold, Alphabet could feasibly overtake Microsoft for second place within a few years. Amazon Web Services' growth has reaccelerated, but it still trails Google Cloud's pace, a sign that more enterprise customers are choosing Google for AI infrastructure.
Dethroning Amazon Web Services outright would take considerably longer, given how wide the gap between the leader and its peers remains.
Source: The Motley Fool
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