Google offers surprising reason for investors to cheer | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

The year 2025 has been tricky for Google parent Alphabet (GOOGL) and its patient investors, but the script seems to have flipped this summer.

After a courtroom overhang eased, the stock jumped higher, pushing year-to-date gains to roughly 26% while delivering a power-packed multi-week rebound.

The swing factor is Google Cloud. In July, the unit posted a whopping $13.6 billion in Q2 sales, up 32% year over year, while operating income skyrocketed to about $2.8 billion.

It’s proof enough that AI-fueled demand is culminating in bottom-line success, not just press releases.

Now comes the catalyst that could potentially send its investors into a tizzy.

A single metric from Google Cloud offers a clearer window into future expansion than headline sales. And it just moved in a way that puts fresh momentum behind the stock’s recent activity.

Google’s cloud engine is building momentum.

Image source&colon; Bloomberg/Getty Images

Google Cloud backlog surges past $100 billion

The headline number for investors to consider is Google Cloud’s remaining performance obligation (RPO), which has surged to an eye-catching $106 billion.

CEO Thomas Kurian stressed that this backlog is swelling quickly than sales and that more than 50% will convert within a couple of years.

“We’re seeing growth from net new customers. We’re seeing deeper relationships with existing customers. We’re broadening our addressable market,” Kurian told investors. “As a result of that, we’re seeing growth in revenue, our remaining performance obligations or backlog, and operating margin.”

More importantly, these aren’t just contracts on paper.

Some of the biggest companies are embedding Google Cloud’s AI into their daily operations. Home Depot, for instance, is using it to field HR help desk requests.

AES has tapped it to streamline regulatory and audit processes, reducing cycle times. And Tyson Foods is deploying it inside its supply chain.

Kurian also spotlighted the critical importance of Gemini 2.5, Google’s latest large-scale AI model.

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He said the model reached a whopping 1 trillion tokens 20 times quicker than Gemini 1.5, leading to greater adoption across developers and SaaS companies.

“Canva is an example of a company using our diffusion models to create image and video content. ServiceNow is one of many SaaS companies that use our model, Gemini,” Kurian noted.

That mix of a surging backlog and real-world enterprise use shows Google Cloud’s AI push is gaining traction where it matters most.

Google Cloud’s AI edge widens

Google Cloud’s expansion isn’t just about the sheer scale at which it’s operating, but also AI-native.

The stack layers Gemini models with specialized silicon (TPU v5p), along with an “AI Hypercomputer” architecture that’s developed for massive training and low-latency inference.

That dual combo has helped take Google’s cloud market toward a $99 billion quarter, with the Big G tightening its grip.

Where Google Cloud ranks (Q2 2025, cloud infrastructure market share):

#1 Amazon Web Services: 30%
#2 Microsoft Azure: 20%
#3 Google Cloud: 13% (record high)
#4 Alibaba Cloud: 4%
#5 Oracle: 3%

What sets Google Cloud apart from the competition:

AI everywhere: “Gemini Everywhere” allows clients to efficiently run Gemini in public cloud, on-premises, and at the edge, which is very important for industries with stringent regulatory requirements.
Custom silicon tailwind: TPU v5p lays the foundation for Google’s large-scale model training, offering superb performance/efficiency leverage compared with general-purpose GPUs.
Developer gravity: Google says over 4 million developers are building with Gemini, which is a robust flywheel that deepens platform lock-in.
Multicloud-friendly move: With some data-transfer fees scrapped in the EU/UK, the switching costs are effectively lowered, which also makes hybrid/multicloud a lot easier.
Momentum check: Google Cloud’s Q2 sales hit $13.6 billion (+32% year-over-year), which reinforces that AI services are resulting in healthier top-line growth alongside share gains.