Alphabet Reports Surprise Q2 Earnings, Expands Capital Investment to $85 Billion

Second Quarter Revenue Reaches $96.4 Billion, Net Income at $28.2 Billion
Capital Investment Increased by $10 Billion This Year Amid AI Boom
Stock Price Jumps Over 3% in After-Hours Trading

Alphabet, the parent company of Google, has reported earnings that exceeded market expectations. Riding the wave of the artificial intelligence (AI) boom, the company will increase its capital investment this year from the previous $75 billion to $85 billion. Following the surprise earnings announcement, Alphabet's stock price is up more than 3% in after-hours trading.

Reuters Yonhap News

On July 23 (local time), Alphabet announced that its revenue for the second quarter of this year reached $96.43 billion, with net income at $28.2 billion. These figures represent increases of 14% and 20%, respectively, compared to the same period last year. Earnings per share (EPS) were reported at $2.31.

This performance surpassed the estimates compiled by market research firm LSEG, which had forecast revenue of $94 billion and EPS of $2.18.

Breaking down the results by segment, advertising revenue rose 10.4% year-on-year to $71.34 billion. Of this, YouTube advertising revenue came in at $9.8 billion, exceeding the market forecast of $9.56 billion compiled by StreetAccount. Cloud computing revenue also increased by 31% to $13.62 billion, surpassing the expected $13.11 billion. Traffic acquisition costs were reported at $14.71 billion.

In addition, other segments such as Waymo, the autonomous vehicle division, and Verily, the life sciences division, recorded combined revenue of $373 million.

Alphabet explained that the expansion of this year's capital expenditures to $85 billion is due to "strong and growing demand for cloud products and services."

Sundar Pichai, CEO of Alphabet, stated that Google's AI search service, AI Overview, has now surpassed 2 billion monthly users in more than 200 countries. This is an increase from 1.5 billion users in the previous quarter.

Additionally, Pichai noted that Google's AI chatbot service, Gemini, now has more than 450 million monthly active users.

After the surprise earnings announcement following the market close, Alphabet's stock price was up 3.13% in after-hours trading as of 5:07 p.m. that day.

This content was produced with the assistance of AI translation services.