- Alphabet reported blowout Q2 earnings with adjusted earnings of $9.11 per share, significantly exceeding Wall Street's consensus estimate of $2.88 per share according to FactSet.
- The company's revenue for the quarter reached $199.8 billion, surpassing estimates of $117.1 billion.
- Google Cloud revenue grew 82% year-over-year to $24.8 billion, exceeding analysts' expectations of 63% growth.
- Despite the strong earnings report, Alphabet stock fell more than 3% in premarket trading, dropping to $329 after raising its capital spending forecast.
- US stock futures also slipped, with Nasdaq 100 futures down 0.3% and S&P 500 contracts down 0.3% as crude oil prices advanced.
- Alphabet's capital expenditures for the quarter were $44.9 billion, a 101% increase from the same period last year, as the company invests in infrastructure for artificial intelligence.
- The company now expects to spend between $195 billion and $205 billion on capital expenditures, up from a previous forecast of $180 billion to $190 billion.
- Alphabet reported a negative free cash flow of $5.9 billion for the quarter, attributed to its capital investments.
- Shares of Alphabet were down 3.7% at $329 in Thursday's premarket, having previously fallen as much as 4.7% on the capex news.
Alphabet's second-quarter earnings exceeded expectations, with adjusted earnings of $9.11 per share, a staggering 294% increase from the previous year. Revenue reached $199.8 billion, surpassing estimates of $117.1 billion.12
Despite these impressive figures, shares dropped 3.7% in premarket trading, reflecting investor concerns over the company's increased capital expenditure forecast. Alphabet now anticipates spending between $195 billion and $205 billion on capital expenditures, up from a previous estimate of $180 billion to $190 billion. This significant rise is attributed to the company's ongoing investments in infrastructure to support its artificial intelligence initiatives.7810
In addition, Google Cloud revenue grew by 82% year-over-year, reaching $24.8 billion, exceeding analyst expectations of 63% growth. However, the company reported a negative free cash flow of $5.9 billion for the quarter, driven by its capital investments. Alphabet's capital expenditures for the quarter were $44.9 billion, a 101% increase from the same period last year.39
Despite the stock's decline, Alphabet shares have gained 12% this year, indicating a complex market response to its ambitious growth strategy.
“Alphabet's cloud revenue surged 82% to $24.8 billion in the second quarter, topping analyst estimates of 63% growth. The company also raised its 2026 capex forecast to as much as $205 billion, more than double 2025 levels, fueling investor concerns over AI spending.”
