Alphabet Inc., Google’s corporate parent, recently marked a significant financial milestone by achieving its first-ever quarter with more than $100 billion in revenue. This impressive feat, reaching $102.3 billion in the July-September period, underscores the enduring strength and influence of its internet empire despite facing considerable legal and competitive pressures. The company’s revenue surged by 16% from the previous year, accompanied by a remarkable profit of nearly $35 billion, or $2.87 per share, representing a substantial 33% increase from the same time last year. Both figures comfortably surpassed analysts' projections, leading to a celebration among investors who drove Alphabet’s stock price up by more than 6% in extended trading, positioning the shares for new highs.

This robust financial performance comes on the heels of a U.S. Justice Department landmark monopoly case against Google’s dominant search engine. The court ruling was widely perceived as a mild rebuke rather than a crippling blow to the company. U.S. District Judge Amit Mehta rejected a Justice Department proposal to break up Google, concluding that rapid advancements in artificial intelligence (AI) technology are already fostering new competition. Conversational “answer engines” from rising tech stars like ChatGPT and Perplexity are providing consumers with more alternatives, influencing the judge’s cautious handling of Google’s search monopoly.

Despite the legal victories, the competitive landscape is intensifying. OpenAI, the creator of ChatGPT, and Perplexity have launched AI-powered web browsers, directly challenging Google’s industry-leading Chrome browser. The Justice Department had unsuccessfully sought to persuade Judge Mehta to order the sale of Chrome. In response, Google has been strategically embedding more AI features into its search engine, Chrome, and other products, aiming to protect its market share while simultaneously venturing into new technological frontiers.

Alphabet CEO Sundar Pichai highlighted the success of these efforts, announcing that Google’s AI-powered Gemini app now boasts 650 million monthly users. Pichai, during a conference call with analysts, expressed optimism, stating that Google is in an “expansionary moment” and that AI is driving tangible business results across the company.

To fuel its AI ambitions, Google has embarked on a significant spending spree, a trend seen across other major tech companies that has raised concerns about a potential bubble. Alphabet now anticipates budgeting between $91 billion and $93 billion for capital expenditures this year, an increase from the $85 billion projected in its previous quarterly report. The majority of these funds are earmarked for constructing the massive data centers essential for powering AI. Alphabet’s chief financial officer, Anat Ashkenazi, further advised analysts to anticipate a substantial increase in capital expenditures next year, with more specifics to be provided in early 2026. This aggressive investment strategy signals that, as Investing.com analyst Thomas Monteiro observed, Google is not prepared to relinquish its lead in a world where AI-driven search volumes are steadily reshaping its legacy business.

A core strength sustaining Google’s growth is its lucrative ad network, which the company has diligently built over a quarter-century. In the third quarter, Google’s ad sales reached $74.2 billion, marking a 13% increase from the previous year. Furthermore, the burgeoning AI craze has significantly benefited Google’s Cloud division, which manages data centers for other enterprises. Google Cloud emerged as the fastest-growing segment of Alphabet, posting revenues of $15.2 billion in the past quarter, a robust 34% increase from last year.

While Google appears to have navigated the legal challenges concerning its search engine relatively well, it still faces a potentially damaging blow from another Justice Department case targeting the technology underpinning its ad network. Earlier this year, U.S. District Judge Leonie Brinkema condemned certain aspects of Google’s ad technology as an illegal monopoly. Judge Brinkema is currently deliberating on potential remedies to restrict the company in the future, with the Justice Department advocating for a court order to compel Google to divest pieces of its ad network. A ruling on this critical issue is not expected until early next year.