Alphabet Q2: $9.11 EPS, $199.8B Revenue Top Estimates
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- Alphabet reported Q2 adjusted EPS of $9.11 vs. the $2.88 consensus estimate — a 294% YoY increase that included $6.26/share in equity securities gains — on revenue of $199.8 billion versus the $117.1 billion analysts had expected.
- Google Cloud revenue grew 82% YoY to $24.8 billion, well ahead of the 63% growth Wall Street had modeled, becoming the clearest proof point in the report for AI-driven cloud demand.
- Alphabet's Q2 capex of $44.9 billion was up 101% YoY, with 2026 full-year guidance previously set at $180–190 billion and Evercore ISI's Mark Mahaney flagging 2027 capex potentially hitting $300–350 billion.
- Alphabet in June unveiled plans to raise $80 billion through equity sales to fund 2026 and 2027 capex as AI component costs rise with demand outstripping supply.
- Search revenue of $63.3 billion narrowly missed the $63.4 billion estimate, while advertising revenue of $81.6 billion topped the $81.3 billion forecast.
- Alphabet stock was essentially flat in late trading despite the beats, with shares still up 12% year-to-date and 82% over the past 12 months, and BofA's Justin Post reiterating a Buy with a $430 price target.
Why it matters: The headline EPS beat was inflated by $6.26/share in equity securities gains, and with search revenue slightly missing estimates and the stock barely moving despite a massive revenue beat, investors are now pricing Alphabet's $80 billion equity raise and the possibility of $300–350 billion in 2027 capex over top-line surprises — making the cloud segment's 82% growth the real operative number for the rest of Big Tech's earnings cycle.
