Alphabet's Profits Keep Pace With AI Spending Boom

Alphabet's profits show resilience as AI infrastructure spending surges: Q1 operating margin rose to 36.1% (a five-year high), with revenue up 22% and operating income up 30%. Cloud revenue jumped 63% to over $20 billion and Search grew about 19%. However, capex jumped to about $35.7 billion last quarter and is expected to approach $44 billion next quarter, with full-year capex up to $190 billion; depreciation will weigh on profits as these assets come online, and margins may ease toward the mid-30s this quarter as the AI bill continues to climb.