GOOGL earnings

Alphabet Inc. reported Q2 FY2026. EPS came in at $9.11 against a $2.87 consensus, beat by 217.4%. Revenue was $119.8B versus $116.5B expected, beat by 2.8%. Gross margin was 61.6%, down 80 bps from last quarter.

Alphabet Inc. reported a strong Q1 FY2026, with revenue and EPS both significantly beating street estimates. Revenue grew 22% year-over-year to $109.9 billion, while EPS surged 82% to $5.11, driven by strong performance across Google Services and Google Cloud.

Alphabet Inc. beat the Street on both revenue and EPS, but the variant view is that investors are still treating the $175 billion to $185 billion 2026 capex plan as a margin ceiling rather than evidence of demand that is already visible in 48% Cloud growth and a $240 billion backlog. The surprise was not merely the +2.2% revenue beat or +9.7% EPS beat; it was that Search accelerated, Cloud demand expanded, and Services margin absorbed AI investment while consolidated EPS still came in at $2.82.

The market likely priced Alphabet Inc. as an ad-led earnings beat with AI capex risk; the print argues for the opposite variant: Cloud backlog, custom silicon scale, and Services monetization are turning capex into a defensible growth asset rather than a margin tax. The risk is not that Alphabet is spending too much in isolation, but that investors underwrite the $91 billion to $93 billion 2025 CapEx plan without giving credit for the $155 billion Cloud backlog and the 23.7% Cloud margin already visible in the model.