Alphabet Surges 34% in April as It Targets Nvidia’s AI Chip Dominance

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In April, Alphabet took advantage of the general market’s robust performance, along with its own specific positive developments.
The main factor was an exceptionally strong first-quarter performance, fueled by a 63% increase in Google Cloud revenue compared to the previous year.
The remarkable expansion of Google Cloud is fueled by strong interest in its artificial intelligence offerings and technological framework.
10 stocks that are more favorable than Alphabet ›

Shares of Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)rocketed 33.8% more in April, according to data fromS&P Global Market Intelligence.

Last month marked Alphabet’s strongest monthly performance since October 2004, which was two months following its initial public offering (IPO), when the stock (previously known as Google) increased by 47.1%.

For further information, in April, theS&P 500 index returned 10.5%, and the technology-focusedNasdaq Composite index returned 15.3%. Artificial intelligenceStocks related to artificial intelligence had an exceptionally strong month. (ChipmakerAdvanced Micro Devices, for instance, skyrocketed 74% in April.)

Therefore, Alphabet’s stock benefited from the overall market’s momentum, but it also experienced specific events that influenced its performance.

Strong Q1 performance, fueled by Google Cloud

Alphabet’s stock increased consistently during April, with its largest increase occurring at the month’s end following the release of impressive first-quarter 2026 results on April 29. On April 30, the shares jumped by 10%.

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After this release, numerous Wall Street companies greatly increased their one-year price projections.

In the first quarter, Alphabet’s revenue rose 22% compared to the previous year, reaching $109.9 billion. Revenue from Google Services climbed 16% to $89.6 billion, while Google Cloud revenue surged 63% to $20.0 billion, fueled by high demand for its AI solutions and data centers. The company’s wide-ranging and strong performance highlights its effectiveness in generating income from its AI investments.

Earnings per share (EPS) rose 82% compared to the previous year, reaching $5.11, surpassing the Wall Street prediction of $2.63. Nevertheless, a significant portion of the net income, amounting to $36.9 billion, was derived from unrealized gains on investments in non-traded private equities.

We can infer that these “paper gains” mainly pertain to AI model developer Anthropic — a key rival to the creator of ChatGPT.OpenAI– and, likely to a lesser extent, SpaceX. Alphabet is a major shareholder in both of these rapidly expanding companies, which might prove beneficial for it when they become publicly traded.

The most effective measure to assess Alphabet’soperatingOperating income is considered performance. This figure amounted to $39.7 billion in the quarter, reflecting a 30% increase compared to the previous year.

Google Cloud’s backlog is expanding rapidly

CEO Sundar Pichai pointed out a particularly impressive figure regarding Google Cloud during the earnings call: “[O]ur backorder nearly doubled from one quarter to the next, reaching more than $460 billion.” Keep in mind this reflects sequential quarter growth, not a year-over-year comparison.

This remarkable increase in backlogs indicates strong potential for Google Cloud’s expansion over the next few years at minimum.

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Alphabet will offer its TPUs to certain clients

Pichai disclosed a new source of income during the company’s earnings call:

As the demand for TPUs [Tensor Processing Unit] increases among AI research labs, financial institutions, and high-performance computing applications, we will start providing TPUs to a limited number of customers within their own data centers in a hardware setup to broaden our potential market reach.

In April, the company launched its eighth-generation TPUs, with each model designed for either AI training (TPU 8t) or AI inference (TPU 8i). Previously, TPUs were only accessible for rent through Google Cloud. This new approach could pose a potential threat to the current leader in data center AI chips,Nvidia, and its graphical processing units (GPUs).

In summary, Alphabet is doing well in its consumer-focused businesses as well as its enterprise solutions. The company’s strategy to begin selling TPUs will create an additional source of income. Additionally, its initial investments in Anthropic and SpaceX are likely to be profitable. Its stock may be a good option to consider purchasing.

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Beth McKennaholds shares in Nvidia. The Motley Fool holds shares in and recommends Advanced Micro Devices, Alphabet, and Nvidia. The Motley Fool has adisclosure policy.