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Alphabet Q2 earnings top revenue view, but capex worries weigh on shares
Alphabet reported $119.8 billion in Q2 revenue, but it raised 2026 capex to $195 billion to $205 billion and warned of near-term margin pressure.
Alphabet (GOOG, GOOGL) reported Q2 2026 results after the close on July 22, showing a mixed quarter that left the stock lower on AI infrastructure spending concerns, Yahoo Finance said. The company beat revenue expectations, with revenues up 24% year over year to $119.8 billion versus analysts' $116.9 billion estimate.
On operating performance, Google Search revenues rose 17% year over year, slightly below estimates, while YouTube ad revenues increased 13% and beat expectations. Cloud remained the standout, with cloud revenues growing 82% year over year, ahead of consensus expectations of 63% growth.
Alphabet also highlighted cloud order backlog, including chips, rising by more than $50 billion versus Q1 to surpass $500 billion. Still, the company said it expects near-term margin pressure because it is relying on third-party compute capacity amid a demand and supply mismatch.
In its outlook, Alphabet raised its 2026 capital expenditures budget to between $195 billion and $205 billion, which was described as $15 billion higher than prior guidance. Despite investors previously forgiving a capex hike in the Q1 earnings call, the stock moved lower on the latest results, according to Yahoo Finance.