By Dan Gallagher
Google is still technically third place in the cloud. But it's now a not-so-distant third, and that is telling.
First-quarter results from parent company Alphabet late Wednesday showed Google's cloud computing arm driving particularly strong growth for the period. Revenue surged 63% year over year, the strongest growth since Google started disclosing its cloud revenue in 2019. That brought Google Cloud's quarterly revenue to a little over $20 billion.
That is still well below the $37.6 billion Amazon reported for its AWS cloud business for the same period. Microsoft still doesn't report revenue for its Azure cloud business, but analysts estimate that it landed at $27.2 billion for the March-ending quarter, according to Visible Alpha. AWS generated 88% more revenue than Google Cloud in the recent quarter, but that gap was 139% a year before. Google's cloud growth also beat Wall Street's targets by a much wider margin than did Amazon's and Microsoft's cloud units. Alphabet's shares jumped nearly 10% by Thursday afternoon while Amazon and Microsoft both declined.
Google's gap looks likely to keep closing fast. The company disclosed Wednesday that group-wide remaining performance obligations-a measure of contracted revenue not yet recognized-now sits at $460 billion. That represented a 90% jump in just three months and put Google ahead of Amazon's own reported revenue backlog of $364 billion. Amazon noted Wednesday that its backlog at the end of the quarter does not include a recent $100 billion deal signed with Anthropic, which means that number will likely go up substantially in the company's next quarterly report.
But Google's backlog won't be standing still either. The company said Wednesday that its cloud business now includes its internally-designed TPU chips that it has started shipping to external customers for use in their data centers. That could end up growing substantially as AI developers seek more alternatives to Nvidia for computing needs.
Wall Street sees Google's Cloud revenue hitting $147 billion in 2027, which would shrink the gap with AWS to 48% based on current projections for that business. A lot can happen between now and then, and Amazon's historic strength in cloud computing should never be dismissed. But for Google, cloud is clearly no longer a side hustle.
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(END) Dow Jones Newswires
April 30, 2026 14:58 ET (18:58 GMT)
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