Google earnings: Alphabet beats sales as cloud soars
Alphabet reported second-quarter google earnings that topped Wall Street sales forecasts, with revenue of $119.8 billion rising 24% year over year and Google Cloud jumping 82% to $24.8 billion. Capital spending hit $44.9 billion as investors weigh whether the AI buildout will keep delivering growth.
Key Takeaways
- Alphabet revenue hit $119.8 billion, beating the $116.93 billion LSEG consensus.
- Google Cloud rose 82% to $24.8 billion, ahead of a $22.4 billion StreetAccount estimate, with backlog at $514 billion.
- Second-quarter capital expenditures reached $44.9 billion, up 100% year over year.
- Search advertising grew 17% to $63.3 billion, roughly in line with expectations.
- CEO Sundar Pichai said the Gemini App now has 950 million active users.
Did Alphabet beat revenue estimates in google earnings?
Yes. Alphabet’s fiscal second-quarter revenue rose 24% to $119.8 billion from $96.4 billion a year earlier, according to CNBC’s live coverage. That topped the $116.93 billion expected by LSEG.
Earnings per share came in at $9.11. CNBC noted it was unclear whether that figure was comparable to the $2.89 LSEG estimate.
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Why does cloud growth matter for Alphabet’s outlook?
Google Cloud was the clearest beat. Revenue jumped 82% to $24.8 billion from about $13.6 billion a year ago, well ahead of the $22.4 billion analysts had forecast for roughly 64% growth.
The company also reported a cloud backlog of $514 billion. CNBC said Google’s cloud growth has been accelerating ahead of Microsoft and Amazon Web Services, after the unit topped $20 billion last quarter.
How are AI spending and Gemini shaping investor focus?
Capex totaled $44.9 billion in the quarter, slightly above StreetAccount’s $44.8 billion estimate and up 100% from a year earlier. FactSet consensus expects about $187.1 billion in Alphabet capital spending for 2026.
In April, Alphabet raised 2026 capex guidance to $180 billion–$190 billion. CFO Anat Ashkenazi has said 2027 spending is likely to “significantly increase.”
Pichai said AI investments are “redefining what’s possible across every part of our business,” citing a strong AI pipeline. The Gemini App alone has 950 million active users and can process 22 billion API tokens per minute, he said in the company release.
Search still anchors the model: Google search revenue grew 17% to $63.3 billion, roughly matching StreetAccount’s $63.4 billion estimate. Shares had been pacing for a third straight monthly decline amid AI-spending skepticism heading into the print, CNBC reported.