Alphabet reports its second-quarter earnings after the market closes today, with analysts closely watching the company’s massive artificial intelligence infrastructure spending and cloud growth momentum as GOOG stock faces mounting scrutiny over ballooning capex.
Wall Street expects Alphabet to post earnings per share of $2.89 and revenue of $116.9 billion, according to LSEG consensus, marking solid performance but arriving amid investor concerns about the sustainability of its capital spending spree.
The company raised its 2026 capital expenditure guidance to $180 billion to $190 billion in April, up from its earlier forecast of $175 billion to $185 billion. The consensus estimate for full-year 2026 capex is $187.1 billion, according to FactSet. This represents nearly double the $91.4 billion Alphabet spent in 2025, underscoring the scale of its bet on AI infrastructure.
Google Cloud is expected to deliver $22.3 billion in Q2 revenue, representing 64% year-over-year growth, according to StreetAccount. That pace would accelerate from 63% growth in the first quarter and significantly outpace rival cloud services from Amazon Web Services, which grew 28%, and Microsoft Azure, which expanded 40%.
The cloud unit’s strength reflects surging demand for AI infrastructure and Google’s tensor processing units, or TPUs. CEO Sundar Pichai said on the last earnings call that large companies are running more apps on Google’s cloud while incorporating the company’s AI models. The Gemini Enterprise assistant for corporate workers, starting at $21 per person per month, is gaining traction.
However, Google’s AI pipeline has become a focal point for investor skepticism. The company reportedly delayed the launch of its flagship Gemini 3.5 Pro AI model after it failed to meet internal performance goals, particularly in coding ability. Bloomberg reported the model was originally scheduled for June but has slipped into July and beyond. On Tuesday, Google debuted three cheaper Gemini models, including Gemini 3.6 Flash and Gemini 3.5 Flash Cyber, designed to address cost concerns as businesses clamp down on rising token expenses.
The Gemini delays underscore competitive pressure from Anthropic and OpenAI, which have released newer frontier models ahead of Google’s schedule. Investors want to see how Google’s models compare, especially as businesses seek cheaper alternatives and Chinese AI competitors gain ground.
YouTube advertising revenue is expected to reach $10.8 billion in Q2, up from $9.8 billion a year earlier, implying roughly 10% growth. That marks a deceleration from 11% expansion in the first quarter as the platform reaches greater scale with over 3 billion users. Google’s search business is forecast to hit $63.4 billion from $54.19 billion last year.
Google’s earnings call with analysts is scheduled for 4:30 p.m. ET. The earnings report marks the first major test this earnings season for the capital expenditure trade fueling the AI revolution, as technology giants pour billions into data center infrastructure to keep pace with skyrocketing compute demand.
Sources
- CNBC — Alphabet Q2 earnings expectations, capex guidance, Cloud growth forecasts, Gemini model delays, and analyst commentary on AI spending concerns
- LSEG — Consensus analyst estimates for Q2 EPS and revenue
- FactSet — 2026 capex consensus estimate and Q2 revenue forecasts by segment
- StreetAccount — Cloud and segment revenue growth expectations
