Alphabet earnings to test AI monetisation as investors scrutinise hyperscaler spending
Analysts expect earnings per share of US$2.95 on revenue of US$116.98 billion, with cloud growth and new chip development offering potential upside despite broader sector reassessment.
Alphabet is scheduled to release its second-quarter earnings after market close on Wednesday, providing a critical data point on how major technology firms are converting substantial artificial intelligence investments into revenue. The report arrives as investors reassess the AI sector, digesting massive capital expenditure on data centres and chips while grappling with the reality that demand for computing power currently exceeds supply.
Wall Street consensus projects the company will report earnings per share of US$2.95 on revenue of US$116.98 billion. This represents a significant acceleration from the US$2.31 in earnings and US$96.4 billion in revenue recorded during the same period last year. Revenue excluding traffic acquisition costs is anticipated to reach US$101.5 billion, underscoring the scale of the tech giant’s operations.
Cloud Platform revenue is expected to hit US$22.4 billion, reflecting a 64 per cent increase from the US$13.6 billion reported in the second quarter of 2025. The Cloud Platform has emerged as a primary growth driver for Alphabet as enterprise customers increasingly adopt its AI offerings. Additionally, remaining performance obligations are projected to top US$488.1 billion, a 351 per cent jump from the previous year, indicating strong demand for future delivery of cloud services.
Amid the financial reporting, Alphabet has moved to clarify its product roadmap following reports of delays to its Gemini 3.5 Pro model. A spokesperson told Yahoo Finance that the company is "shipping quickly" and is actively testing the 3.5 Pro model, an upgraded Flash model, and other variants with partners and the US government. The clarification comes after Bloomberg reported concerns regarding the model's capabilities relative to competitors.
The company also received a boost following reports from The Information that Google is developing a new chip, codenamed Frozen v2. Designed to increase efficiency when running Gemini by including bits of the model to cut processing time, the development highlights Alphabet’s efforts to optimise infrastructure. Over the past three months, Alphabet’s stock has risen roughly 4 per cent, outperforming peers such as Amazon, which has remained flat, while Meta and Microsoft have declined by approximately 6 per cent and 5 per cent respectively.
