Alphabet reported Q2 2026 earnings that beat Wall Street expectations, with total revenue rising 24% to $119.8 billion as Google Cloud revenue surged 82% year-over-year to $24.8 billion, driven by strong enterprise demand for AI infrastructure and services.
The cloud acceleration marked a significant jump from Q1’s 63% growth rate, far exceeding analyst expectations of 64% growth, according to Reuters. Google Cloud’s $514 billion backlog underscores the sustained momentum in AI-driven demand from enterprises worldwide.
Google’s cloud business has emerged as the company’s fastest-growing segment, outpacing rivals Amazon Web Services and Microsoft Azure in growth rate. The third-largest cloud provider is capitalizing on the AI infrastructure boom as companies race to secure compute capacity for developing and training AI models, helping Google land major deals including contracts with Anthropic.
On the earnings front, adjusted earnings per share came in at $2.85 versus the expected $2.89, according to CNBC. Total net profit reached $112.11 billion, up 298% year-over-year, though nearly $99 billion of that came from unrealized gains on equity investments in Anthropic and SpaceX rather than core operations.
Capital expenditure growth underscored Alphabet’s aggressive AI infrastructure buildout. Q2 capex doubled year-over-year to $44.9 billion, with the company raising its full-year 2026 guidance to a range of $195 billion to $205 billion. Finance chief Anat Ashkenazi told analysts the increase reflects an acceleration in delivering capacity to meet surging demand, with about 60% of infrastructure investments going to servers and 40% toward data centers and networking equipment.
The robust capex and cloud results may ease some investor concerns over whether Alphabet’s massive AI spending will generate sustainable revenue growth. Big Tech is expected to spend well over $700 billion on AI infrastructure this year, with Morgan Stanley estimating total tech capex could exceed $1 trillion in 2026.
Beyond cloud, Google’s search business grew 17% to $63.3 billion in revenue, slightly trailing Wall Street estimates of $63.4 billion. YouTube advertising jumped 13% to $11.06 billion, topping estimates. CEO Sundar Pichai highlighted that the recent FIFA World Cup drove record search queries, with 1.7 billion unique viewers globally watching World Cup-related videos on YouTube during the event.
On the AI product front, Pichai noted that Gemini, Google’s flagship AI assistant, now has 950 million active users and can process 22 billion API tokens per minute, up from 16 billion last quarter. The company’s Antigravity AI coding tool reached 2.4 million weekly active users, competing with OpenAI’s Codex, which reported 10 million weekly active users as of early July.
Sources
- CNBC — Q2 earnings details, cloud revenue growth of 82%, total revenue, EPS, capex figures, capex guidance increase to $195-$205 billion, cloud backlog, Gemini and Antigravity user metrics, search and YouTube revenue
- Reuters — Cloud revenue growth acceleration from 63% to 82%, analyst expectations of 64% growth, cloud backlog of $514 billion, competitive positioning versus AWS and Microsoft
