Berliner Tageblatt - Alphabet beats expectations in second quarter, cloud revenue nearly doubles

CEO Sundar Pichai said in a statement that the strong quarter was driven in part by growth in its Gemini AI models and AI-powered search queries, as well as YouTube, where more than 1.7 billion unique viewers tuned in to videos related to the 2026 FIFA World Cup.

"Our AI investments are redefining what's possible across every part of our business," Pichai said, adding that the company's Gemini AI app had reached 950 million monthly active users.

The company recorded more than $119 billion in total revenue between April and June, up 24 percent from the same period last year.

Its cloud business brought in more than $24 billion in the quarter, and net profit skyrocketed to over $112 billion.

The company's stock fluctuated after hours and dropped as much as 3 percent.

Major US tech companies have been spending billions of dollars to build out AI infrastructure and develop increasingly advanced AI models.

In June, Google parent company Alphabet announced it would raise up to $80 billion in stock to fund its AI efforts, with Warren Buffett's Berkshire Hathaway committing $10 billion.

Capital expenditures reached $44.9 billion for the quarter, nearly double the year-earlier level though slightly below the $45.1 billion analysts had expected.

Alphabet's AI-related capital expenditures are expected to reach $180-190 billion in 2026 and rise further in 2027.

The spending is part of a broader race across the tech sector to stay competitive amid soaring demand for computing power.

Amazon, Microsoft, Alphabet and Meta are collectively on track to pour roughly $700 billion into AI data centers, chips and computing infrastructure this year.

J.Fankhauser--BTB