Google Beats Estimates, But AI Spending Is Rising

Google-parent Alphabet exceeded second-quarter earnings expectations thanks to strong performance in cloud computing and its search business, but the tech giant’s spending on artificial intelligence (AI) is soaring.

Alphabet reported earnings of $2.31 per share and revenue of $96.4 billion—up 14% year-over-year. I Photo: Google AI X

The company has committed tens of billions of dollars to building AI data centers and raised its capital expenditure forecast for the year, Adam Levine reported for Barron’s Daily.

Alphabet reported earnings of $2.31 per share and revenue of $96.4 billion—up 14% year-over-year. Google Cloud led the way, with revenue rising 32% to $13.6 billion.

The number of Google Cloud deals worth over $250 million doubled compared to last year.

Advertising revenue was also strong in both Search and YouTube, with total ad sales up 10% from 2024, including a 13% jump in YouTube ad revenue. CEO Sundar Pichai credited increased viewership, especially among sports fans, for the gains.

However, some investors were concerned by Alphabet’s increased capital spending forecast.

The company raised its full-year projection from $75 billion to $85 billion, just three months after reaffirming the lower figure. With about $40 billion already spent in the first half of the year, another $45 billion remains for the second half.

Alphabet’s wild card remains Waymo, its self-driving taxi unit. Waymo has the most advanced autonomous driving technology on the market and is currently operating in five U.S. cities.

Through March, its vehicles had logged 71 million passenger miles.