Google Cloud Revenue Doubled to $30.7 Billion on Locked-In Power

Google Cloud revenue rose 103% to $30.709 billion in the third quarter, and the engine behind that number isn't a model — it's electricity that Alphabet has already contracted for. Google's parent, Alphabet (NASDAQ:GOOGL), spent the past year signing long-term power deals, and those agreements now underpin the fastest-growing piece of its business.

The stock, meanwhile, sits at $288.15, down 18.06% over the past month. That disconnect — surging cloud profit and a falling share price — is what makes the power story worth attention.

Why does grid access decide AI growth?

A single data center can draw over a gigawatt of power, roughly enough for 750,000 homes, according to Colorado legislative staff. In April, a House Energy and Commerce subcommittee held a hearing titled "AI and the Grid: Meeting Growing Power Demand While Protecting Ratepayers." Getting onto the grid now sets the ceiling on how fast any company can scale AI.

PJM, the largest U.S. grid, sharpened that constraint. It proposed that data centers either bring their own power or accept being cut off remotely during peak demand. Google answered with a long-term supply agreement that includes new nuclear output from upgrading existing reactors. Both companies framed the deal as a direct response to PJM's "bring your own power" proposal.

That wasn't the only move. Alphabet's power portfolio now includes:

• A contracted restart of a nuclear plant in Iowa
• Funding for capacity upgrades at two Georgia nuclear plants
• A Tennessee partnership with Kairos Power and the Tennessee Valley Authority to supply nuclear power to Google's data centers

Each contract converts a regulatory hurdle into an advantage competitors don't hold.

What do the cloud numbers show?

Cloud operating income hit $11.121 billion in the third quarter, up from $3.594 billion a year earlier. Cloud backlog exceeded $460 billion as of the first quarter. Total company revenue grew 24.65% — the 13th consecutive quarter of double-digit growth.

Chief Executive Sundar Pichai said: "Our deep full stack approach is driving momentum across the business."

The balance sheet carries the expansion. Debt to equity stands at 0.143; interest coverage is 175.32x. Management raised the quarterly dividend 5% to $0.22, a 0.59% yield.

How does the valuation compare with Microsoft and Meta?

Microsoft (NASDAQ:MSFT) trades at about 30 times earnings; Alphabet trades at about 13. Unrealized equity gains inflated Alphabet's earnings this year, which flatters the multiple, but the gap remains wide even after discounting it. Microsoft carries debt to equity of 0.291.

Meta Platforms (NASDAQ:META) shows what regulatory risk costs. Its third-quarter EPS of $3.83 absorbed a $9.89 billion charge from a settlement with 52 U.S. state attorneys general over teen mental health. Meta still trades at about 23 times earnings.

What are the risks?

The spending is real. Capex hit $51.355 billion last quarter, and free cash flow came in at negative $9.065 billion. To fund the buildout, Alphabet issued $28.7 billion in senior notes and sold $4.3 billion of Class A and $8.1 billion of Class C shares through its at-the-market program — a move that dilutes existing shareholders. An $8.7 billion loss on equity securities pulled EPS down to $2.12, missing expectations.

Still, operating income rose 29.93% in the same quarter that headline EPS fell short. The money is turning into cloud profit and secured power.

Can the power lead compound?

The Gemini app reached 1 billion users, and first-party models now process about 32 billion tokens per minute. Every one of those requests needs electricity Alphabet has already signed for. Whoever controls the power will shape the next decade of AI — and Alphabet locked it up first.