Alphabet’s most recent quarterly earnings report indicates that Google generated $96.4B in revenue during the previous quarter, surpassing expectations.
Wall Street anticipated that Alphabet would generate $94 billion in revenue, and the substantial increase in earnings took them aback.
In Q2 2025, Alphabet’s diverse AI initiatives were instrumental in the company’s growth, as Google expanded its investments and initiatives in the field.
Additionally, Google’s advertising and Cloud services exceeded expectations. Google’s adjusted earnings per share (EPS) for the second quarter of 2025 were $2.31, with revenue of $81.2 billion, excluding traffic acquisition costs (TAC).
Analysts were anticipating an adjusted earnings per share (EPS) of $2.17 on revenue ex-TAC of $79.6 billion. During the same period last year, the organization generated revenue of $71.3 billion.
CEO Sundar Pichai stated that AI is positively impacting all aspects of the business and generating significant momentum.
“Our new features, such as AI Mode and AI Overviews, are performing well, and Search generated double-digit revenue growth.” YouTube and subscription offerings continue to demonstrate robust performance.
Additionally, Cloud experienced substantial expansion in profitability, backlog, and revenues. Its annual revenue run-rate has now exceeded $50 billion.
Although the report was beneficial, shareholders were concerned that the company would increase its capital expenditure forecast. Alphabet has declared that its capital expenditures will increase to $85 billion. Google had previously estimated that it would generate $75 billion.
Investors have praised AI investing in the context of big tech; however, Alphabet’s surge in forecast investments has generated controversy.
This year, the company is expected to invest $75 billion in expanding its AI capabilities. This will include using vast data centers that operate on its own home-grown chips and Nvidia’s processors.
Additionally, Alphabet (GOOGL) continues to be concerned about the potential repercussions of its antitrust lawsuit against Google Search. The Department of Justice prevailed in the legal dispute, and it is anticipated that a decision will be rendered within the next month.
Many analysts expressed apprehension that Alphabet’s punishment could be so severe that the company would be compelled to sell its Chrome web browser, significantly contributing to its profits.
Shares of Alphabet (GOOGL) stock declined by approximately 2% as markets closed in response to the successful earnings report.
