Bloomberg: Google's Earnings Focus on Cloud Business, Sustaining Its High Growth Trend Is the Key.

According to Bloomberg, Alphabet will release its second-quarter financial results after U.S. stock market close on Wednesday. Investors will focus on whether Google Cloud’s growth can prove its large-scale AI investments are yielding returns. Market forecasts show Alphabet’s revenue and net profit will both grow around 25% year-over-year, while Google Cloud’s revenue is expected to jump nearly 65% to $22.4 billion, compared to a 63% increase in the first quarter. Alphabet previously projected its capital expenditures would reach up to $190 billion in 2026, and noted that spending would “increase significantly” in 2027. Analyst estimates compiled by Bloomberg show its 2027 capital expenditures could rise to $262 billion, nearly three times the 2025 level. Investors are therefore hoping the cloud business will continue accelerating to confirm that its expanding AI infrastructure investments are delivering returns. Alphabet’s stock has risen around 11% since the start of 2026, but is down 14% from its all-time high hit in May. Jonathan Cofsky, an investment manager at Janus Henderson, said that if the cloud business accelerates its growth and search operations remain strong, it will help ease market concerns about the scale of spending and overall investment returns. Alphabet’s current 12-month forward price-to-earnings ratio is around 23x, higher than its 10-year average of 21x and on par with the Nasdaq 100 index. Mark Mahaney, an analyst at Evercore ISI, believes that given the sustained strong demand for AI infrastructure, Google Cloud’s revenue forecast still has significant upside potential.