Alphabet Inc., Google’s parent company, has reported impressive financial results for the fourth quarter of its 2025 fiscal year, surpassing market expectations in both revenue and earnings per share. The earnings call, held on February 4, 2026, highlighted significant growth in key areas such as Search, Cloud services, and artificial intelligence (AI), with the Gemini AI model playing a pivotal role in the company’s current performance and future strategy.
Financial Performance Overview
Alphabet’s quarterly revenue reached approximately $113.8 billion, marking a year-over-year increase of about 15 to 18 percent. Net income saw a substantial rise of around 30 percent, totaling approximately $34.5 billion. Notably, Google Cloud experienced a remarkable growth of about 48 percent, contributing to a substantial backlog of business. Other services, including YouTube and Search, also bolstered the company’s top-line strength. Looking ahead, Alphabet has set its capital expenditure guidance for 2026 significantly higher than analysts anticipated, reflecting its commitment to investing in AI infrastructure.
Strategic Partnership with Apple
A noteworthy development during this earnings period is Alphabet’s collaboration with Apple to enhance Siri’s AI capabilities. Apple has confirmed plans to upgrade Siri using Google’s Gemini AI models, marking a significant departure from its previous reliance on internal technology. According to industry expert Mark Gurman, Apple intends to implement a custom Gemini model with approximately 1.2 trillion parameters to enhance Siri’s intelligence later this year. This model is substantially larger than any AI models Apple has previously utilized.
Industry observers estimate that Apple will compensate Google around $1 billion annually for access to this customized version of Gemini. This arrangement allows Apple to maintain user data protection on its own servers while leveraging Google’s advanced AI technology for complex tasks. During the earnings call, Alphabet executives confirmed the collaboration, discussing how Gemini will support AI functions within Apple’s ecosystem. This partnership signifies a new era where competing tech giants collaborate on foundational AI tools.
Apple’s Q1 2026 Earnings
In its recent Q1 2026 earnings report, Apple focused on iPhone sales, services, and the impact of new AI features on growth. A significant portion of the discussion centered on how Siri’s upgrade with Gemini AI aligns with Apple’s strategic direction and future product plans.
Comparative Financial Highlights
– Google (Q4 2025):
– Revenue: Approximately $113.8 billion.
– Cloud revenue growth nearing 50 percent.
– Annual revenue surpassing $400 billion.
– Apple (Q1 2026):
– Emphasis on iPhone and services performance.
– Highlighting AI initiatives, including the Siri partnership strategy.
Both companies are integrating AI into their core products, albeit through different approaches. Google focuses on developing large AI models and embedding them across its services, while Apple combines internal development with strategic partnerships, utilizing external AI technology as needed while maintaining control over privacy and hardware.
Market Outlook and Implications
Investors and analysts are closely monitoring how increased AI investments will influence profits and growth trajectories. Alphabet’s plan to escalate capital expenditures to support data centers and chip development demonstrates confidence in sustained AI demand.
The Siri and Gemini partnership also sets a precedent in the tech industry. Apple’s decision to license one of the most advanced AI models available indicates a shift in how major tech firms collaborate. The outcomes of this partnership will become more apparent as Apple rolls out its enhanced Siri in 2026.
In summary, the earnings call confirmed Alphabet’s robust financial health, significant growth in cloud and AI sectors, and a groundbreaking collaboration with a major competitor on next-generation AI tools built on Google’s Gemini model.
