Alphabet Beats Q2 Estimates, Boosts 2025 AI and Cloud Spending Forecast

Alphabet (NASDAQ: GOOGL), the parent company of Google, reported second-quarter earnings that surpassed Wall Street expectations, driven by strong performance in search, YouTube, and cloud services. The company also announced a significant increase in its 2025 capital expenditure forecast to accelerate investments in artificial intelligence and cloud infrastructure.

Alphabet posted earnings per share of $2.31, exceeding analyst projections of $2.17. Quarterly revenue climbed to $96.43 billion, topping the consensus estimate of $93.9 billion. Shares rose over 1% in after-hours trading following the results, reversing an initial 2% dip.

The tech giant raised its 2025 capital spending outlook to approximately $85 billion, up from the previous $75 billion forecast and well above analyst expectations of $73.31 billion. This marks a 13.3% increase from last year as Alphabet intensifies AI development and cloud data center expansion to meet growing demand.

CEO Sundar Pichai highlighted robust growth across the company, noting that Google Cloud now has an annual revenue run-rate exceeding $50 billion. He also emphasized AI-driven innovations in search, citing the rollout of “AI Mode” in the U.S. and India and the rapid adoption of “AI Overviews,” which have reached over 2 billion monthly users across 200 countries. These AI enhancements are driving 10% more global search queries in applicable categories.

Pichai also pointed to continued momentum in Alphabet’s self-driving unit, Waymo, which has logged over 100 million autonomous miles and is expanding tests in more than 10 U.S. cities, including New York and Philadelphia.

This earnings beat and aggressive investment plan underscore Alphabet’s push to lead in AI and cloud markets amid intensifying competition from rivals like Microsoft and Amazon.