This article first appeared on GuruFocus.
Alphabet (NASDAQ:GOOG) is scheduled to report second-quarter financial results after the market closes Wednesday, with investors expected to focus on whether continued expansion in Google Cloud and artificial intelligence can support growth.
In the previous quarter, Alphabet posted revenue of $109.9 billion, up 22% from a year earlier, while earnings per share exceeded analyst expectations. Google Cloud revenue increased 63% year over year to $20 billion, and its operating margin widened to 32.9% from 17.8%. Net income reached $62.6 billion, aided in part by unrealized gains on equity investments. Alphabet also reaffirmed its planned 2026 capital spending of $175 billion to $180 billion.
Alphabet has continued expanding its AI offerings through partnerships with Accenture and Cognizant to broaden deployment of its Gemini platform. Meanwhile, BofA Securities lifted its Google Cloud growth forecast for the quarter to 70% and maintained a Buy rating, while Wedbush initiated coverage with an Outperform rating.
Analysts expect Alphabet to report earnings of $3.04 per share on revenue of $116.88 billion. Alphabet has exceeded earnings estimates in each of the past eight quarters while missing revenue expectations only once during that span.
