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Alphabet delays Gemini launch as AI spend concerns build ahead of results
Alphabet pushed its 2026 capital expenditure guidance to between $180 billion and $190 billion, and it is expected to report April-June revenue of $116.93 billion.
Alphabet is heading into its second-quarter earnings report on Wednesday with investor focus on a delay to a key Gemini model and concerns about whether payoff from major data-center spending will arrive fast enough. Reuters said the Google parent pushed back the launch of Gemini 3.5 Pro from June, a move that comes months after it lifted expectations on the back of a blockbuster quarter for cloud sales.
The delay lands as competition intensifies from Chinese open-source models in areas tied to AI coding tools and agentic AI tasks. Reuters also noted worries that steep AI bills are driving fear that Big Tech may be over-building capacity, with one portfolio manager saying Google’s approach centers on its broader ecosystem.
Alphabet has already signaled large-scale spending, raising its 2026 capital expenditure guidance to between $180 billion and $190 billion and planning about $85 billion in equity offerings that include an investment from Berkshire Hathaway. The stock is down about 9% since late April, when it posted a 63% jump in cloud sales, and analysts expect overall results to reflect continued momentum in cloud alongside ad growth that moderates.
Ahead of the report, LSEG data cited by Reuters projects Alphabet’s April-June revenue will rise 21.3% to $116.93 billion. Cloud sales are estimated to grow at a similar 64% pace, while advertising revenue is forecast to increase 13.7%, and Reuters said the cloud business has benefited from demand for Google’s custom AI chips, including multi-billion-dollar agreements with Meta Platforms and Anthropic.