Google reported blockbuster second-quarter revenue and is preparing to invest more in AI infrastructure.
Bloomberg/Getty Images
Google's latest earnings call offered a familiar message: AI is driving growth, and it's also getting more expensive.On Wednesday, Alphabet reported second-quarter revenue of $119.8 billion, up 24% from a year earlier, while Google Cloud posted another blockbuster quarter as enterprises raced to adopt AI. At the same time, executives made it clear the company is prepared to spend even more to meet surging demand.Here are the three biggest takeaways from Alphabet's earnings.Google is spending more on AI and is willing to sacrifice marginsGoogle is prioritizing long-term AI growth over short-term profitability by doubling down on its AI buildout.The company raised its 2026 capital expenditure forecast to between $195 billion and $205 billion, up from a previous outlook of up to $190 billion, saying demand for AI infrastructure continues to exceed available capacity.Finance chief Anat Ashkenazi said during Wednesday's earnings call that the higher spending reflects an accelerated rollout of computing capacity.Google also plans to lean more heavily on third-party cloud providers while it builds out its own infrastructure, a strategy Ashkenazi said will create "modest margin pressure in the near term" but help the company "keep growing our customer base and capture greater overall value."
