Alphabet Q2 2026: Google Cloud Jumps 82% to $24.8B as Revenue Tops Forecasts
Alphabet posted second-quarter 2026 revenue of $119.8 billion, up 24% year-over-year and comfortably ahead of the roughly $116.9 billion Wall Street had pencilled in, with Google Cloud emerging as the standout performer of the results released Wednesday. Alphabet reported second-quarter revenue of $119.8 billion on Wednesday, up 24% year over year, as Google Cloud posted its strongest growth in recent quarters and net income rose on a large investment gain. Google Cloud revenue climbed 82% to $24.8 billion, driven by demand for AI infrastructure and enterprise AI solutions, the company said. Despite the top-line beat, Alphabet shares slipped in after-hours trading once investors digested a fresh hike to the company’s AI spending plans.
Google Cloud’s 82% Surge Leads the Charge to $514 Billion Backlog
Cloud was the headline act of the quarter. On the earnings call, CEO Sundar Pichai told investors Cloud revenue grew 82%, powered by strong demand for AI infrastructure and AI solutions, and Cloud backlog grew to $514 billion. That marks a sharp acceleration from the first quarter, when Alphabet posted revenue of $109.9 billion and Google Cloud grew 63% to $20.0 billion.
Profitability in the cloud division improved just as sharply. Cloud operating income reached $8.8 billion, up from $2.8 billion in the same period a year earlier. Pichai said the unit’s momentum is coming from both new and existing clients, telling analysts on the call that Google is “winning new customers, more than doubling our acquisition velocity year-over-year,” while “existing customers… are exceeding their commitments by more than 50%.”
YouTube Ad Revenue Climbs 13% on the Back of World Cup Viewership
For gamers and streamers who track the creator economy, YouTube’s numbers will be of particular interest. YouTube advertising revenue increased 13% to $11.1 billion for the quarter, beating the roughly $10.8 billion analysts had modelled, according to Variety. Pichai singled out the platform’s reach around live sport, noting that month over month, people turn to YouTube for major world events, with over 1.7 billion unique viewers watching World Cup-related videos during the FIFA World Cup 2026.
Google also flagged its AI-powered “Ask YouTube” tool as a growing engagement driver. Pichai said the feature, which lets viewers query individual videos using Gemini, saw more than 140 million users engaged with Ask YouTube on the Watch page in June 2026 alone. Search & Other revenue, meanwhile, rose 17% to $63.3 billion, per the earnings release.
Headline EPS of $9.11 Masks a Miss on Core Operating Profit
The quarter’s most eye-catching figure was diluted earnings per share of $9.11, but that number was inflated by unrealised gains on Alphabet’s minority stakes in companies including Anthropic. Overall, Alphabet posted Q2 revenue of $119.8 billion (up 24%) and net income of $112.1 billion (up nearly fourfold), or $9.11 per share, smashing analyst estimates. The company’s Q2 net income included a whopping $99 billion net gain on equity securities during the period.
Strip out that accounting gain and the picture looks less spectacular: adjusted earnings per share came in at $2.85, versus $2.89 expected by LSEG, on revenue of $119.80 billion versus $116.93 billion expected. Consolidated operating income still climbed 30% to $40.8 billion, with margin expanding two points to 34%, according to Yahoo Finance’s coverage of the results.
Capex Guidance Raised to $205 Billion as Shares Slip After Hours
Investors’ main concern was spending, not sales. The company boosted its expected capex spend in 2026 to as high as $205 billion, up from prior guidance, and warned that outlays will keep climbing. Quarterly capital expenditure alone doubled in the quarter, to $44.9 billion, as the company continued to heavily invest in building out AI capacity. Management also cautioned that 2027 spending will increase significantly as Alphabet races to keep pace with AI demand.
The reaction on Wall Street was muted at best. Alphabet shares were only fractionally higher as tepid capex and a miss on operating margin overshadowed a top- and bottom-line beat and an 82% surge in the company’s cloud revenue. Separately, Yahoo Finance reported shares were down roughly 3.4% in extended trading once the new capex figures landed.
Antigravity Coding Tool and Gemini Adoption Feed the AI Push
Beyond the headline segments, Alphabet used the call to highlight adoption of its developer-facing AI tools — relevant to the growing number of studios experimenting with AI-assisted coding. Developers are increasingly adopting Google’s artificial intelligence coding tool Antigravity, which now has over 2.4 million weekly active users, Pichai said, though he did not disclose how many of those users are paying customers. On the consumer AI side, Gemini models now process 22 billion API tokens per minute and the Gemini App has 950 million monthly active users, while nearly 90% of the Fortune 100 are using Gemini Enterprise.
For Australian and New Zealand businesses, the results land against a backdrop of steadily expanding local Google Cloud infrastructure, including cloud regions in Sydney and Melbourne and a dedicated interconnect point in Auckland that the company says lets Kiwi customers keep data on its private network. As Alphabet pours record sums into AI data centres globally, that regional footprint underpins the cloud and Gemini services increasingly used by local studios, publishers and enterprise customers across the Tasman.
The board also confirmed a quarterly cash dividend of $0.22 per share for Class A, B, and C stock, payable on September 14, 2026, underscoring that even amid the capex surge, Alphabet’s underlying cash generation from advertising and cloud remains a priority for shareholders.
Read also: Google’s $98B Anthropic, SpaceX Stake Gains Fuel Record Q2 2026 Profit
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