Key Takeaways

  • Revenue $100.4B (+11% YoY) beat consensus of $98.95B by ~$1.5B (+1.5%); GAAP diluted EPS $2.65 beat $2.50 consensus by ~6%, driven by Search resilience, Cloud margin expansion, and disciplined opex.
  • Google Cloud revenue $14.8B (+55% YoY, +13% QoQ) — accelerating sharply on Gemini-tier AI workloads; Cloud operating margin expanded to 19.6% (vs. 14.1% prior year).
  • Search & Other revenue $54.2B (+10% YoY) confirmed AI Overviews and AI Mode are monetizing at parity with classic SERPs; query volume up double-digits despite ChatGPT and Perplexity competitive pressure.
  • YouTube Ads $10.4B (+12% YoY) led by Connected TV and Shorts monetization; Subscriptions (YouTube TV/Premium, Google One, NFL Sunday Ticket) crossed an annualized $50B+ run-rate.
  • FY26 capex guide raised to $90-95B (from $85B) — entirely earmarked for AI compute, TPU v7 (‘Ironwood’) deployment, and data center power. Operating cash flow $39.5B in Q1; net cash position $96B.
  • $70B incremental buyback authorization; Q1 capital return $21.0B ($18.3B repurchases, $2.7B dividends). Dividend held at $0.21 per share.
  • Maintain BUY; raise 12-month price target to $220 (from $205) on roll-forward to FY27 estimates and a higher Cloud contribution multiple. Risk-reward remains the most balanced among mega-caps trading at ~20x FY27 GAAP EPS.

Snapshot

MetricQ1 2026 ActualConsensusVariance
Revenue$100.42B$98.95B+1.5% / +$1.47B
GAAP Diluted EPS$2.65$2.50+6.0% / +$0.15
Operating income$33.5B$32.0B+4.7%
Operating margin33.4%32.3%+110 bps
Google Cloud revenue$14.80B$14.20B+4.2%
Search & Other$54.20B$53.10B+2.1%

What’s in the full report

The PDF (~12-page report) includes the full narrative, charts, and detailed analysis across:

  • Detailed Results — Q1 2026
  • Segment color
  • Cloud — The Acceleration Continues
  • Capex and AI Infrastructure
  • Capital Return
  • Investment Thesis — Updated
  • What’s changed since our last update
  • Risks
  • Catalysts (next 90 days)
  • Estimate revisions
  • Scenario analysis
  • Bottom line

The web page is a free preview. The full source-grounded analysis — including all charts, scenario tables, and the complete narrative — is in the PDF, available with one credit.