Markets GOOGL JUL 22, 2026

Alphabet clears $119.8B on 82% Cloud growth, lifts 2026 capex to $205B

Q2 revenue beat consensus by $2.9B and Google Cloud printed $24.8B against a $22.4B Street bar; shares slipped on the analyst call as capex guidance jumped.

BY HENLEY MARRAST · MARKETS DESK

Alphabet posted $119.8 billion in Q2 revenue, up 24% year-over-year and $2.9 billion ahead of the LSEG consensus of $116.93 billion, while lifting its 2026 capex ceiling to $205 billion against a FactSet mark of $187.1 billion. The beat was structural, not cosmetic: Google Cloud grew 82% to $24.8 billion, blowing past the $22.4 billion Street forecast that had penciled in 64% growth. Shares still slipped on the call. The market wasn’t reading the print; it was reading the capex slide.

That’s the tension defining this cycle. Google Cloud accelerated off a Q1 base of $20.0 billion and 63% growth, and the backlog swelled to $514 billion from $462 billion a quarter earlier, evidence that customers are booking capacity years forward. Consolidated operating margin expanded two points to 34%, and operating income rose 30%. Search & other came in at $63.3 billion versus StreetAccount’s $63.4 billion, Google Services grew 15% to $94.5 billion, and YouTube ads added 13%. Adjusted EPS of $2.85 missed the $2.89 consensus, an artifact of the spend.

The spend is the story. Q2 capex hit $44.9 billion, doubling year-over-year and landing on StreetAccount’s $44.8 billion estimate. To fund it, Alphabet raised $49.6 billion in equity and $20.3 billion in senior unsecured notes during the quarter, per Quartz. Citi has flagged the risk of negative free cash flow at Google, Amazon, and Meta by 2027–2028. JPMorgan pegs combined hyperscaler AI capex at $750 billion in 2026, with the four majors’ spend growing 77% year-over-year.

Sundar Pichai framed the quarter with the required maximalism: “our AI investments are redefining what’s possible across every part of our business.” The Gemini App now claims 950 million active users, API throughput jumped to 22 billion tokens per minute from 16 billion, and Antigravity, the coding tool, has 2.4 million weekly actives. A $0.22 dividend is payable September 14.

Microsoft, Meta, and Amazon report in the coming weeks. Alphabet has set the bar, and the bill.

Sources

About the author

Henley Marrast

MARKETS DESK

Henley Marrast covers AI-equity flow, accelerator demand, and earnings prints for AI Sheet Report. She leads coverage of the public AI complex from the New York markets desk, with a focus on the daily tape and quarterly results. She has been writing about technology markets for several years.