Alphabet went into its second-quarter results on Wednesday carrying one question louder than the rest: whether the tens of billions it is funnelling into AI infrastructure has started to earn its keep. Judged by the after-hours share price, the answer was not yet.
The company reported revenue of $119.8bn for the three months to June, up 24% from $96.4bn a year earlier and comfortably ahead of forecasts.
Google Cloud did the heavy lifting, with revenue climbing 82% to $24.8bn, operating income more than tripling to $8.8bn, and its margin widening to about 36%. Group operating margin edged up to 34% from 32%.
That extends a streak that had Alphabet closing in on Nvidia as the world’s most valuable company, and it slots into a Big Tech capex cycle now running past $650bn a year. Cloud backlog, the contracted work Google has yet to book, rose to $514bn from $490bn.
Going in, the pressure was explicit. Bloomberg framed the quarter as a test of whether the spending pays off, and Alphabet was hardly alone in facing it, with investors weighing the same question at Tesla and across the rest of the Magnificent Seven the same week.The 💜 of EU techThe latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!
