# Google’s cloud revenue surges 82% as Meta’s AI costs cut margins

Digest AI · Business & Funding · published 2026-09-27T19:35:00Z

Canonical: https://digestai.news/story/googles-cloud-revenue-surges-82-as-metas-ai-costs-cut-margins

## Summary

Alphabet and Meta both spent tens of billions on AI data centers in the second quarter, but only Google saw a direct return from customers. Google Cloud revenue hit **$24.77 billion**, up **82%** year-over-year, driven by demand for AI-powered services. Nearly **90%** of Fortune 100 companies use **Gemini Enterprise**, and AI features boosted Search traffic by **17%**, helping Google’s operating margin expand to **34%**. The company also reported an **$82.03 billion unrealized equity gain**, inflating its earnings per share to **$9.11** despite no new model or product launch mentioned in the article.

Meta, meanwhile, saw its ad-driven revenue grow **14%** in impressions and **12%** in ad pricing, but expenses rose **55%** to **$42.03 billion**, including **$2.40 billion in legal charges** and **$1.18 billion in severance**. Meta’s CEO, Mark Zuckerberg, called selling AI APIs and compute to third parties a ‘new muscle,’ but the company remains ‘demand constrained’ for compute. Long-term debt rose from **$46.5 billion to $98.2 billion**, and Google’s CFO noted buybacks are paused. Meta’s **$130 billion to $145 billion** capex plan for 2026 hinges on future returns, while Google’s cloud growth must outpace its **nearly fivefold increase in interest expense** to justify its spending.

## Key points

- Google Cloud revenue hit **$24.77 billion**, up **82%** year-over-year, driven by AI demand and Gemini Enterprise adoption
- Meta’s ad revenue grew **14%** in impressions and **12%** in pricing, but expenses rose **55%** to **$42.03 billion**
- Google’s operating margin expanded to **34%**, while Meta’s fell to **31%** from **43%** due to higher costs

## Why it matters

Google’s cloud revenue growth shows direct ROI from AI infrastructure spending, unlike Meta’s ad-driven model, which relies on internal AI use. This gap highlights differing business strategies: Google monetizes AI externally, while Meta invests heavily in internal tools with uncertain returns.

## Sources

1. [Hyperscaler Bang for Buck: The AI Capex ROI Has Two Clear Winners](https://247wallst.com/investing/2026/09/28/hyperscaler-bang-for-buck-the-ai-capex-roi-has-two-clear-winners) (247wallst.com, 2026-09-27)

Part of the developing story: [Tech Giants Race to Monetize AI](https://digestai.news/thread/google-tests-pilot-that-pays-publishers-when-their-content-appears-in-ai-results) (6 stories)

## Cite

Digest AI, "Google’s cloud revenue surges 82% as Meta’s AI costs cut margins", 27 September 2026, https://digestai.news/story/googles-cloud-revenue-surges-82-as-metas-ai-costs-cut-margins

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