At a tech conference recently, Alphabet‘s CEO, Thomas Kurian, shared how Google is harnessing the power of its innovative artificial intelligence solutions—covering models, chips, agents, and security—to enhance its cloud computing division. The news had a positive impact, causing Google stock to rise during midday trading.
Kurian noted, “We have invested significantly in developing our advanced AI technology over the years—think chips, systems, and various tools. This has been a long-term commitment, not just a strategy of reselling AI solutions from others. Our market success can be attributed to this unique product offering that is resonating well with our customers, which in turn is expanding our market potential and boosting our revenue and income margins.”
In more financial news, Google Cloud recently reported a second-quarter revenue of $13.62 billion, reflecting a 32% increase from the previous year, surpassing estimates of $13.14 billion. The surge in revenues is heavily linked to AI-related tasks like training models and processing applications.
Gains in Cloud Profitability
Since Kurian took the helm, profitability within the Google Cloud division has significantly improved, with the operating profit jumping by 141% to $2.83 billion in the last quarter.
During the conference, Kurian mentioned that this transition toward AI is still in its growth phase.
“We’ve witnessed an influx of new customers joining us, while also strengthening ties with existing clients. We’re making inroads into new market segments, which is reflected in our increasing revenue, performance obligations backlog, and enhanced operating margins,” he explained.
Kurian also highlighted that the cloud service’s backlog now stands at a whopping $106 billion.
AI Adoption in Enterprises
Kurian elaborated on Google’s initiative to create industry-specific AI Gemini models tailored for sectors like financial and pharma services.
“We’re observing demand from various sectors. In fact, nine out of the top 10 AI labs globally are on board as our customers. Industries are recognizing the value in deploying AI models, particularly in capital markets that are moving from traditional computing to AI inference. There’s also increased interest in high-performance computing applications,” he noted.
He added, “In the business landscape, organizations are leveraging this technology not only for digital product development but also to enhance customer service, streamline core operations, and improve coding quality across IT departments. It’s definitely a step forward for many.”
Looking ahead, Google anticipates its capital expenditure to reach $85 billion by 2025, a 62% increase. The majority of this budget is projected to support computer servers and other essential AI infrastructures.
Kurian, who previously held a significant position at Oracle, became the CEO of Google’s cloud division back in November 2018. His primary challenge has been to capture a portion of the market held by dominant cloud service players such as Amazon and Microsoft.
When Kurian took over, the clientele was largely tech companies. However, he shifted the focus toward enterprise customers, emphasizing data analytics and AI tools.
Furthermore, Google Cloud is seeing exciting developments alongside AI computing contracts from partners like OpenAI and Meta Platforms, which could pave the way for enhancing its share in the market dominated by Nvidia AI chips through the promotion of its own AI accelerators known as TPUs.
Current Google Stock Overview
On the market today, Google stocks rose by about 1.7%, hovering near 238. It’s notable that Google shares rose 25% so far in 2025 after a sluggish first half of the year.
Expanding its geographical reach could be on the agenda, as Alphabet made a strategic move in March to buy the rapidly growing cybersecurity firm Wiz for $32 billion in cash, a decision that might bolster their cloud business further.
Illustrating confidence in Google stock, it holds an impressive Composite Rating of 98 out of 99, ranked by IBD Stock Checkup. This rating cumulates several proprietary assessments, highlighting what top-performing stocks should aim for a rating above 90.
Moreover, Google retains an Accumulation/Distribution Rating of A-, indicating more investments pouring in rather than out during the recent trading quarter.
For ongoing insights into topics like artificial intelligence and cybersecurity, you can follow Reinhardt Krause on X.
