Did Alphabet Stock Just Become a Screaming Buy? CEO Sundar Pichai Says ‘Nearly All Gen AI Unicorns Use Google Cloud'
But perhaps the most eye-catching claim of the call came when Pichai stated, 'Nearly all Gen AI unicorns use Google Cloud,' underscoring Alphabet's emergence as the foundational infrastructure layer for the generative AI economy.
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Alphabet's strong quarter was driven by robust performance across its businesses. Search experienced double-digit growth, bolstered by new features like AI mode and AI overviews, which now contribute to over 2 billion monthly users across more than 200 countries and territories.
Beyond mere add-ons, these AI integrations are reshaping how users interact with Google. AI overviews alone are responsible for a 10% increase in global search for the types of queries that display them, and AI mode — Google's end-to-end AI-powered search experience — has already surpassed 100 million monthly active users in the U.S. and India. Younger users, in particular, are flocking to new multimodal search options such as Lens and Circle to Search, signaling a generational shift in how people access information.
Beyond search, Google Cloud stood out as a star performer. The unit now commands a $50 billion annual revenue run rate, with enterprise demand accelerating significantly. Deals over $250 million have doubled year-over-year, and the number of new GCP customers grew 28% quarter-over-quarter.
Perhaps most impressively, Pichai revealed that nearly all generative AI unicorns — along with leading research labs like SAFE Superintelligence and Physical Intelligence — now rely on Google Cloud's infrastructure. From custom TPUs to optimized AI software like PyTorch and JAX, Google has built a compelling, differentiated stack. Customers like Salesforce (CRM), DBS Bank, Wayfair (W), and Target (TGT) are using Gemini-powered agents for everything from data analytics to cybersecurity, with reported productivity gains that are measurable and meaningful.
Gemini, Alphabet's family of large language models (LLMs), is another pillar of this AI-first strategy. The Gemini 2.5 models now power many of Google's own features, including search and video generation. Over 9 million developers have built for Gemini, while the company's new video generation model, VO3, has become a viral success (over 70 million videos have been created with it since May). Monthly token processing across all surfaces has doubled in just one quarter to nearly one quadrillion tokens. This scale highlights how deeply integrated AI has become in Google's architecture and user experience.
YouTube, too, reported major strides. Shorts revenue per watch hour in the U.S. has caught up to — and in some countries, surpassed — that of traditional in-stream ads. AI-driven features are improving recommendations and auto-dubbing, increasing reach for creators and advertisers alike. New tools for Shorts creators and the expansion of YouTube Premium Lite into 15 new countries further diversify the platform's monetization potential.
Additionally, Waymo, Alphabet's autonomous driving unit, expanded into Atlanta and broadened operations in Austin, Los Angeles, and the Bay Area. With over 100 million autonomous miles now driven and teen accounts being introduced in Phoenix, Waymo is steadily scaling its reach.
Taken as a whole, this quarter's results paint the picture of a company not just sustaining growth, but accelerating into a new era. With deep investments in infrastructure, research, and product integrations, Alphabet is positioning itself as both the interface and the engine of the AI economy.
For investors, the takeaway is clear: Alphabet is no longer just an ad-tech giant; it's becoming the digital backbone of the next technological wave. Pichai's comment about AI unicorns wasn't just a flex; it was a signal that if you believe in the future of AI, Alphabet might just be a screaming buy.
On the date of publication, Caleb Naysmith did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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