Alphabet Inc.'s (GOOGL  ) (GOOG  ) Google Cloud has projected a revenue increase of at least $58 billion in the next two years, underlining the division's pivotal role in the company's future.

Google Cloud Projects 55% Of Revenue From Backlog In 2 Years

Thomas Kurian, the head of the unit, stated at the Goldman Sachs Communacopia + Technology conference that about 55% of the $106 billion backlog is anticipated to turn into revenue over the next two years, not accounting for any new contracts or clients, reported Reuters. The cloud division's annual revenue run rate has already surpassed $50 billion, as announced during the July earnings call.

Google Cloud experienced a 28% quarter-over-quarter rise in new customers, according to Kurian. Nine of the ten largest AI labs, including competitors such as OpenAI and Anthropic, have become its clients.

Google Cloud is expanding as the tech sector works to prove to Wall Street that AI can generate returns matching its significant investments. Its growth is especially notable given the regulatory hurdles that could advantage competitors.

Growth Surges Despite Small Revenue Share

Although cloud computing accounted for just 14% of Alphabet's revenue last quarter, Google Cloud remains one of its fastest-growing divisions. With the tech sector aiming to demonstrate to Wall Street that AI can generate returns matching its hefty investments, Google Cloud is strategically positioned to benefit from this momentum.

Google Cloud's growth narrative has been gaining strength. The cloud unit has been growing at a brisk pace, outpacing Microsoft's (MSFT  ) Azure in recent quarters. This suggests that Google is increasingly seen as a serious contender in the cloud space.

Alphabet Eyes Blockchain Finance, Boosts In-Car Cloud Growth

Moreover, Alphabet is preparing to enter blockchain finance with the commercial launch of Google Cloud Universal Ledger (GCUL) in 2026. This move could potentially rival Ripple Labs' XRP Ledger, indicating Alphabet's ambition to compete in payments and tokenization.

Furthermore, Google Cloud is expanding its partnerships to drive next-generation in-car experiences. This strategic move is expected to further bolster Google Cloud's growth and revenue.

Alphabet holds a momentum rating of 86.12% and a growth rating of 79.21%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock's historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance.