Online advertising giant Alphabet (NASDAQ: GOOGL) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 21.8% year on year to $109.9 billion. Its GAAP profit of $5.11 per share was 91.3% above analysts’ consensus estimates.

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Revenue Growth

Alphabet proves that huge, scaled companies can still grow quickly. The company’s revenue base of $196.7 billion five years ago has more than doubled to $422.5 billion in the last year, translating into an incredible 16.5% annualized growth rate.

Alphabet’s growth over the same period was also higher than its big tech peers, Amazon (12.6%), Microsoft (14.8%), and Apple (7.6%). Comparing the four is relevant because investors often pit them against each other to derive their valuations. With these benchmarks in mind, we think Alphabet is a bit expensive (but still worth owning).

We at StockStory emphasize long-term growth, but for big tech companies, a half-decade historical view may miss emerging trends in AI. Alphabet’s annualized revenue growth of 15.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Alphabet reported robust year-on-year revenue growth of 21.8%, and its $109.9 billion of revenue topped Wall Street estimates by 2.7%. Looking ahead, sell-side This projection is admirable for a company of its scale and illustrates the market sees some success for its newer AI-enabling products.

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Google Search: Alphabet’s Bread-and-Butter

The most topical question surrounding Alphabet today is: “Will new Generative-AI products like ChatGPT and Meta AI disrupt Google Search and its 80%+ market share?”.

Although OpenAI (creator of ChatGPT) doesn’t disclose its financials, we can gain further insight by comparing Google Search to Meta. Meta essentially has a monopoly in social media advertising and is creeping into search with Meta AI, which is powered by its Llama large language model.

Starting with Alphabet, Google Search is by far the most considerable portion of its revenue at 55.4%, and it grew at a 10.6% annualized rate over the last four years, slower than total revenue. It accelerated in recent years, however, growing 13.8% annually over the last two years.

On the other hand, its two-year result was lower than Meta’s 22.7%, showing digital advertising dollars could be flowing to Meta because of its improved AI algorithms and targeting capabilities. Alphabet bulls would argue this trend could reverse because the return on investment from keyword-driven advertising is more tangible, but that hasn’t been the case lately.

Quarterly performance is particularly relevant for Alphabet because it captures the growth of AI and signals whether investors are overestimating its competitive impact. Google Search revenue recorded a hearty year-on-year increase of 19.1% in Q1.

Key Takeaways from Alphabet’s Q1 Results

We were impressed by how significantly Alphabet blew past analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 3.3% to $362.93 immediately after reporting.

Sure, Alphabet had a solid quarter, but if we look at the bigger picture, is this stock a buy? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).