Google Cloud’s backlog skyrockets to $155 billion in Q3, up 46% quarterly and 82% yearly, with operating margins at 23.7%. Over 70% of the backlog relates to AI services, positioning Alphabet for reliable growth and a solid investment in the AI-driven market.

The surge in Google Cloud’s backlog reflects increasing demand for AI infrastructure, driven by large enterprise contracts. CEO Sundar Pichai notes Gemini App’s growth and trend of backlog doubling annually, outpacing overall cloud revenue growth. This points to a booming cloud market and key drivers like AI workloads.

Alphabet’s cloud segment provides high-margin, predictable growth, with Q3 operating margins rising to 23.7%. Google’s backlog insulates against economic downturns, offering visibility into future revenue streams. Despite competition, Alphabet’s AI integration across its ecosystem strengthens its position.

The $24 billion in capital expenditures supports data center expansions and AI hardware, driving backlog growth. Over 70% of the backlog ties to AI services, aligning with global trends. Analysts predict Google Cloud could contribute over 20% to Alphabet’s revenue by 2027.

Investors looking for value will find Alphabet’s forward P/E ratio reasonable given its growth potential. The $155 billion cloud backlog underscores Google Cloud’s AI progress and offers a roadmap to sustained profitability in the AI era. Alphabet remains a solid buy for those betting on tech’s future.

Read more at Yahoo Finance: The 1 Number That Shows Why Alphabet Is a Buy Today