GOOG · Alphabet Inc.

Alphabet's Q2 2026 results exceeded expectations, with total revenue of $119.8 billion (+24% YoY) driven by a standout performance from Google Cloud, which accelerated to 82% growth to $24.8 billion. This marked a significant inflection, fueled by enterprise demand for AI infrastructure and solutions, as well as core GCP services. Google Search & other rose 17% to $63.3 billion, YouTube ads grew 13%, and subscriptions, platforms, and devices increased 15%. Operating margin expanded 2 points to 34%, reflecting operating leverage despite higher R&D investment (up 32% to $18.2B) as the company continues to ramp AI research. Net income surged 298% to $112.1 billion, but this was heavily influenced by a $98.0 billion net unrealized gain on equity securities; excluding that gain, operating performance was strong. The company also raised significant capital during the quarter: $49.6B from equity issuance (Class A/C and mandatory convertible preferred) and $20.3B from senior notes, primarily for AI infrastructure scaling. Free cash flow turned negative at -$5.9B due to elevated capex of $44.9B, highlighting the capital intensity of the AI buildout. Management commentary emphasized the broad adoption of Gemini Enterprise (nearly 90% of Fortune 100) and the momentum in AI across Search, Cloud, and YouTube. No forward guidance was provided. A quarterly dividend of $0.22 per common share was declared, consistent with prior quarters. Overall, the report showcases Alphabet's strong AI-driven revenue acceleration, particularly in Cloud, while the bottom line benefited from non-operating gains. The heavy investment cycle continues, but revenue momentum supports the strategy.