Alphabet (GOOG) delivered stronger than expected second-quarter results after growing demand for artificial intelligence services fuelled rapid expansion in its cloud division, while advertising revenue also came in ahead of market forecasts.
The Google parent reported earnings per share of $9.11 on revenue of $119.8 billion, beating analyst expectations for $116.9 billion in revenue. Despite the stronger performance, the shares were broadly unchanged in after-hours trading.
Google Cloud was once again the standout performer, with revenue climbing 82% from a year earlier to $24.77 billion, exceeding forecasts of $24.56 billion and rising sharply from $13.6 billion in the same quarter last year. The increase reflected continued demand from businesses investing in AI infrastructure and computing capacity.
Advertising remained the company’s largest source of income, generating $81.63 billion, slightly above expectations of $81.12 billion, while remaining performance obligations reached $514 billion, comfortably ahead of the $488.1 billion analysts had expected. The figure represents revenue from contracts that Alphabet has yet to deliver.
Chief executive Sundar Pichai said the company had enjoyed an “amazing quarter”, pointing to overall revenue growth of 24% and accelerating cloud sales driven by demand for AI infrastructure and AI-powered services.
The results arrive at a time when investors are weighing the long-term returns from the technology sector’s huge spending on AI. The industry’s largest companies have committed billions of dollars to new data centres and advanced chips as they race to meet demand, while repeatedly warning that available computing capacity remains below customer requirements.
Alphabet continued to invest heavily, with capital expenditure doubling from a year earlier to $44.9 billion, underlining its commitment to expanding AI capabilities despite growing questions over the scale of industry spending.
The company’s AI roadmap has also attracted attention after reports suggested Google had delayed the launch of its Gemini 3.5 Pro model because of concerns over its competitiveness. Google rejected the claims, saying it continues to release new models while balancing performance with cost efficiency, adding that Gemini 3.5 Pro and updated Flash models are currently being tested with partners.
Earlier this week, Google also introduced three lower-cost Gemini models, including one focused on cyber security, as it broadens its AI offering.
Alphabet has performed better than several of its large technology peers in recent months, with the shares gaining around 4% over the past three months, although they remain below their 52-week high. The stock also benefited from reports earlier this week that Google is developing a new AI chip, known internally as Frozen v2, which could improve Gemini’s efficiency by reducing processing times.
Strong cloud momentum, resilient advertising income and a growing pipeline of contracted business gave Alphabet a solid quarter, reinforcing the company’s position as it continues investing heavily to meet demand for artificial intelligence services.
