Alphabet Q2 Earnings: Google’s accelerating push into artificial intelligence helped parent company Alphabet Inc. clock another quarter of robust growth, even as regulatory heat on its internet empire intensifies.
The April to June quarter results, released Wednesday, signal how deftly Google is managing the transition into an AI-first future while continuing to rake in profits from its core search and ad business. It is a dominance the company has maintained for nearly 25 years.
Profit, revenue beat expectations
Alphabet posted a net profit of $28.2 billion, or $2.31 per share, up 19 per cent from a year earlier. Revenue climbed 14 per cent year-on-year to $96.4 billion, comfortably beating Wall Street expectations on both counts. CEO Sundar Pichai credited “robust growth across the company” and said, “We are at the leading frontier of AI.”
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Despite the upbeat earnings, Alphabet’s stock initially dipped in after-hours trade after the company disclosed a sharp hike in capital expenditures, raising its annual budget by $10 billion to $85 billion to ramp up investment in AI infrastructure. However, investor concerns eased following Alphabet’s earnings call, with the stock rebounding more than 2 per cent in extended trading.
Heavy spending to defend AI lead
Alphabet’s rising capex reflects the growing cost of staying ahead in the generative AI race. Building advanced large language models requires massive compute power, specialised chips, and data centres. These are areas where Google is now pouring in billions to maintain its lead over rivals like OpenAI and Perplexity.
In May, Google introduced AI Mode, a conversational engine integrated into its search platform, further building on AI Overviews, now used by over 2 billion users globally. At the same time, Google has reduced the number of traditional links in its search results, as part of its shift to more AI-native interfaces.
Search and Cloud continue to shine
Search remains Google’s cash cow, bringing in $54.2 billion in ad revenue in Q2, up 12 per cent year-on-year. The company also saw strong traction in YouTube and subscriptions, with Shorts now earning as much per watch hour as traditional in-stream ads in the US, and even surpassing it in some regions.
Meanwhile, Google Cloud reported a 32 per cent jump in revenue to $13.6 billion. The division is riding the AI wave, with growing enterprise demand for tools like Gemini models, AI infrastructure, and AI-enabled services. Google Cloud’s annual revenue run-rate has now surpassed $50 billion.
Pichai touts ‘full-stack’ AI edge
Pichai emphasised Google’s “full-stack” approach to AI, from custom TPUs and data centre infrastructure to world-class models like Gemini 2.5 and user-facing tools like the Gemini App, which now has 450 million monthly users.
He highlighted the viral success of Google’s video generation model Veo 3, which has powered over 70 million video creations since May. Google is also integrating AI across Workspace, Chrome, Android, and Samsung devices, helping double the number of tokens processed across its platforms, from 480 trillion to over 980 trillion per month.
What’s next: Legal clouds and AI battles
Even as Alphabet races ahead in AI, it faces mounting antitrust scrutiny. A US federal judge who recently ruled Google’s search business an illegal monopoly is now weighing remedies, including the potential sale of the Chrome browser.
That cloud hangs over what was otherwise a quarter of standout performance, as Google doubles down on AI to power its next chapter—one that is as much about defending its turf as it is about inventing the future.
Doonited Affiliated: Syndicate News Hunt
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