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Alphabet will be kicking off Big Tech’s second-quarter earnings wave on Wednesday, offering a prime read on the status of the artificial-intelligence boom.
The company has developed a reputation for its full-stack AI solutions, ranging from custom tensor processing units to the Gemini large language model. However, Alphabet’s AI ambitions haven’t been cheap, and the company initiated a record-breaking $85 billion equity raise in June.
“As Alphabet and other AI providers continue to increase capex investments in AI infrastructure, they need to show that their AI is being adopted at scale at the enterprise level, not just on individuals’ desktops,” Rebecca Wetteman, CEO of technology research firm Valoir, wrote in a Monday note.
“AI infrastructure spending isn’t going to pay off in the way investors are expecting if enterprise adoption doesn’t accelerate,” she said, adding that Google has to show enterprises are moving beyond experimentation to standardize their workflows on Gemini.
See more: Alphabet’s stock slump is a ‘tactical buying opportunity,’ according to one analyst
According to analysts polled by FactSet, Alphabet is expected to report $117 billion in revenue and $2.87 in earnings per share for the second quarter. On its last call, Alphabet shared that total capital expenditures for 2026 were expected to be between $180 billion and $190 billion. Analysts project that Alphabet’s capital expenditures amounted to $45 billion for the second quarter.
However, according to Anni Sen, managing partner of BluBird Capital, the capex numbers could “surprise to the upside” as bottlenecks in memory push up component costs for data-center hardware. Alphabet may also be looking to tap the debt markets for further funding down the road, Sen added. That would be in addition to the $40 billion it has raised thus far in 2026.
Cloud growth remains a key metric when evaluating Alphabet’s report. Following impressive expansion in the first quarter, the Wall Street consensus calls for another quarter of 63% year-over-year growth in the cloud unit. Google Cloud has been dealing with capacity constraints as demand exceeds supply, a dynamic that should continue for the rest of 2026, HSBC analyst Paul Rossington wrote in a note last week.
Bank of America analyst Justin Post is even more upbeat, writing that cloud growth could reach 70% in the second quarter as Google accelerates capacity expansion. Additionally, Post expects Alphabet’s capital spending to be “relatively efficient vs. peers, likely benefiting from TPU usage for internal AI capabilities,” he said.
Investors are also expecting the earnings report to shed light on a few recent rumors. Some are questioning whether the company can remain competitive in the AI race following a Bloomberg report last week saying that its latest Gemini model is facing delays. Google DeepMind has also seen some high-profile departures among AI researchers in recent weeks.
On Monday, the Information reported that Google is exploring a new chip, dubbed “Frozen v2,” to run its Gemini models more efficiently. Shares of Alphabet were up 1.5% on Monday following that news.
Read on: Alphabet’s stock falls as Gemini delays suggest Google is struggling to keep up in the AI race
