Google Beats Q2 Earnings Expectations, Raises Capital Expenditures to $85 Billion
Alphabet Inc. (NASDAQ: GOOGL, GOOG), the parent company of Google, delivered strong second-quarter results, surpassing Wall Street expectations on both revenue and earnings. The company’s performance was fueled by continued growth in its advertising, search, and cloud businesses.
Earnings and Revenue Beat Expectations
For Q2 2025, Google reported adjusted earnings per share (EPS) of $2.31, ahead of analyst estimates of $2.17. Revenue, excluding traffic acquisition costs (TAC), came in at $81.2 billion, also beating forecasts of $79.6 billion. This marks a significant jump from the $71.3 billion reported in the same quarter last year.
Advertising and Search Continue to Dominate
Advertising revenue reached $71.3 billion, exceeding projections of $69.6 billion. Search revenue came in at $54.1 billion, beating expectations of $52.7 billion, while YouTube ad revenue rose to $9.8 billion, topping the estimated $9.5 billion.
Google Cloud Grows to $13.6 Billion
Google Cloud Platform (GCP) also performed strongly, reporting $13.6 billion in revenue—above analyst expectations of $13.1 billion. According to CEO Sundar Pichai, cloud revenues, backlog, and profitability all saw robust growth, with an annual run rate now exceeding $50 billion.
Pichai stated, "AI is positively impacting every part of the business, driving strong momentum. Search delivered double-digit revenue growth, and our new features like AI Overviews and AI Mode are performing well. We’re also seeing strong performance in YouTube and our subscriptions offerings."
Capital Expenditures Rise to Fuel AI Growth
Google announced it would raise its capital expenditures (capex) to $85 billion, up from the previously projected $75 billion. The increase reflects Google’s aggressive investment in artificial intelligence infrastructure, including massive data centers powered by its own chips as well as Nvidia processors.
Legal Threats on the Horizon
Despite its financial strength, Google is facing serious legal challenges. A U.S. federal judge ruled that the company violated antitrust laws by excluding competitors in the online search space. Judge Amit Mehta is expected to announce remedies next month, which could include blocking exclusive deals with companies like Apple (AAPL) or even forcing Google to divest its Chrome browser—a move that could significantly impact its core search business.
Investor Outlook on Google Stock
While legal issues loom, Google stock (GOOG) and Alphabet stock (GOOGL) continue to attract investor attention thanks to strong fundamentals and leadership in AI. Investors will be closely watching the Google earnings call and upcoming reports for further insight into the company's growth trajectory.