- Alphabet reports earnings Wednesday, the next test after Google Cloud's latest quarter.
- Google Cloud revenue rose 82% to $24.8 billion in the latest quarter, with $8.8 billion operating income and a 35.6% operating margin.
- Alphabet disclosed its first TPU-system sales for customers' own data centers, a route to AI revenue beyond Google Cloud compute capacity.
- Q2 capital expenditures were $44.9 billion and free cash flow was negative $5.9 billion.
- The 2027 EPS forecast rose to around $14.85 from $14.45 over the previous 90 days.
- Shares traded at $323.57 on Friday, down about 0.21%, and sit 24.7% above the $259.48 GF Value estimate.
- Investors are also watching $5.8 billion in shared AI-research costs.
Quotes
“Investors want to see whether Google Cloud's rapid expansion can keep delivering as AI spending climbs.”
“The problem is money coming in.”