GOOGL: Alphabet Stock Ticks Higher on Double Beat. CEO Pichai Lifts Spending Guidance

Google parent topped both earnings and revenue views and then hiked its capital expenditures forecast by another $10 billion.

📈 Alphabet Pops on Double Beat

• Alphabet stock GOOGL rose as much as 3% after hours Wednesday after reporting a strong second quarter that topped both revenue and earnings estimates. Revenue came in at $96.43 billion, against $94 billion expected. Earnings per share hit $2.31, against $2.18 expected.
• The beat was broad: YouTube ad revenue landed at $9.8 billion, above consensus of $9.56 billion, and Google Cloud brought in $13.62 billion, also topping forecasts. Total revenue grew 14% from last year’s second quarter, handily outpacing the 11% gain Wall Street had penciled in.
• The headline? Google’s core business is doing just fine — but it’s what CEO Sundar Pichai said after the earnings that has everyone buzzing.

💸 CapEx Now at $85 Billion

• Alphabet raised its 2025 capital expenditures guidance to $85 billion, up from its already-ambitious $75 billion forecast just five months ago. That’s nearly 50% higher than what Wall Street expected earlier this year.
• The company said the increase was due to “strong and growing demand” for Google Cloud and AI infrastructure — both seen as critical to Alphabet’s long-term moat, especially when OpenAI’s ChatGPT bot is hard at work to try and soak up a share in the search market.
• The bold spending guidance shows that the company isn’t just dabbling in AI — it’s going all-in. But at these spending levels, investors will want to see productivity, not just potential. Maybe that’s why the modest jump in share price?

🧠 Big Numbers, Small Price Moves

• Despite the strong quarter and positive after-hours action, Alphabet shares remain virtually flat on the year. That’s underwhelming for a stock with this kind of growth — especially when peers like Nvidia NVDA and Meta META are soaring to record territory.
• Some traders are likely hesitant about the massive CapEx ramp, which could pressure free cash flow in the short term. Others may be waiting for a clearer path to monetizing AI beyond infrastructure.
• The takeaway here? Alphabet’s business is firing on all cylinders — search, YouTube, cloud — but it now has to prove that its $85 billion AI bet will turn into something more than silicon and server racks.