SAN FRANCISCO — Google parent company Alphabet (GOOGL) posted stronger-than-expected second-quarter earnings on Wednesday, sending Google stock sharply higher in after-hours trading. The tech giant reported earnings per share (EPS) of $2.31, surpassing Wall Street estimates, while announcing a substantial increase in capital expenditures to $85 billion for the year.
Revenue for the quarter reached $86.3 billion, a 12% increase from the same period last year, driven by growth across Search, YouTube, and its expanding Cloud division. Analysts had expected EPS of $2.12 and revenue of $84.9 billion, according to Yahoo Finance.
“We’re in a period of extraordinary innovation and momentum across our AI stack,” said Alphabet CEO Sundar Pichai in an official blog post following the earnings release. He highlighted continued investment in data centers and custom AI infrastructure as part of the company’s long-term growth strategy.
“We are helping people and businesses unlock the potential of AI while driving durable financial performance,” Pichai added.
Alphabet’s aggressive capital expenditure outlook, up from $66 billion last year, underscores its push to lead the AI infrastructure race. The company cited expansion of its global data center footprint and AI chips as key contributors to the CapEx surge. CFO Ruth Porat confirmed that most of the spending is focused on technical infrastructure and servers to support Gemini, Google’s flagship AI model.
Stock Reaction and Market Impact
Shares of Alphabet Inc. (NASDAQ: GOOG, GOOGL) rose more than 7% in extended trading following the release. The rally comes as investors show renewed confidence in Google’s AI monetization strategy, particularly amid rising competition from Microsoft and Amazon in the cloud and AI services space.
Alphabet’s strong quarter also helped lift broader tech indexes, with the Nasdaq-100 futures ticking up post-earnings. Google stock has gained over 35% year-to-date, outperforming the S&P 500 and signaling robust investor optimism around the company’s AI transformation.
Looking Ahead
Alphabet executives reaffirmed their focus on operational discipline while continuing to scale AI across all business lines. The company is expected to face increased regulatory scrutiny in the U.S. and EU, but its latest results may offer a buffer against near-term policy headwinds.
The Q2 performance follows a series of product rollouts centered around AI integration across Search, Workspace, and Cloud, which the company says are already contributing to revenue growth.
