TradingKey - Alphabet ( GOOGL) ( GOOG) released its second-quarter 2026 financial results after the U.S. market close on July 22, Eastern Time. As of press time,
During the period, Google recorded revenue of $119.796 billion, up 24% year-over-year (up 23% at constant currency), higher than market expectations of $116.93 billion, marking the company's 12th consecutive quarter of double-digit revenue growth. Among this, Google Cloud's growth rate was stellar, surging 82% year-over-year to $24.8 billion.
[Google Stock Chart, Source: TradingView]
Looking at the segment breakdown, Google Services revenue grew 15% year-over-year to $94.54 billion, and its operating profit grew by approximately 20% year-over-year to $39.544 billion. Within this, Google Search & other revenue increased 17% year-over-year, which was basically in line with the StreetAccount estimate of $63.4 billion.
YouTube advertising revenue increased by 13% year-over-year, higher than the $10.8 billion estimated by StreetAccount (which corresponded to an approximately 10% year-over-year increase); revenue from subscriptions, platforms, and devices grew by 15% year-over-year.
The cloud business became the biggest highlight of the quarter. Google Cloud revenue increased by 82% year-over-year to $24.8 billion, far exceeding the $22.3 billion estimated by StreetAccount by approximately 11%. Operating profit increased from $2.826 billion to $8.814 billion, surging by more than 200% year-over-year. Google stated that cloud growth accelerated significantly, primarily driven by demand for Google Cloud Platform (GCP) enterprise AI solutions, enterprise AI infrastructure, and core GCP services.
[Source: Google's 2026 Second-Quarter Earnings Report]
On the profitability side, under GAAP, Alphabet's second-quarter net income was $112.107 billion, surging 298% year-over-year; diluted earnings per share was $9.11, up 294% from $2.31 in the same period last year, which was far higher than the LSEG estimate of $2.89.
It is worth noting that the surge in net income was primarily driven by one-time gains. Other income for the period recorded a net gain of $98.0 billion (compared to $2.662 billion in the same period last year), mainly from unrealized gains on equity securities. Excluding this factor, the company's operating income increased by 30% year-over-year to $40.77 billion, and the operating margin expanded from 32% to 34%, showing that the profitability of its core business remained equally robust.
Regarding capital expenditures, Google's capital expenditure for the second quarter was $44.9 billion, representing a quarter-on-quarter increase of 25.93%, slightly higher than the $44.8 billion previously forecasted by StreetAccount.
[Source: Google's 2026 Second-Quarter Earnings Report]
Google CEO Sundar Pichai stated: "Our AI investments are redefining what's possible across all our businesses. We had a stellar second quarter, with Alphabet's revenue up 24% year-over-year, and Google Cloud's growth accelerating to 82%, driven by demand for AI infrastructure and AI solutions. Gemini Enterprise is seeing widespread adoption, with nearly 90% of Fortune 100 companies using it."
Overall, this earnings report slightly exceeded market expectations: the cloud business significantly outperformed expectations with an 82% growth rate; the 17% growth in the search business indicates that the core advertising foundation remains solid; and the company stated that AI features are driving growth in search queries.
Although the 298% surge in net income was mainly contributed by unrealized gains on equity securities, the 30% increase in operating income and the expansion of profit margins are sufficient to prove that its "full-stack AI" strategy is delivering real business value.
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