Odaily Planet Daily News, crypto analyst qinbafrank posted on platform X stating that Google has clearly indicated for the first time that Google Cloud product revenue primarily comes from TPU system sales, meaning TPUs have become a significant revenue source for the cloud business. Furthermore, this quarter, the profit growth rate of the cloud business significantly outpaced its revenue growth rate, indicating that investments in AI infrastructure have begun to generate high capital returns. The quarterly capital expenditure of $44.9 billion is expected to correspond more to revenue and cash flow contributions over the coming years.
Against the backdrop of sustained demand growth, Google's capital expenditure is not expected to decline. However, the market's future focus is gradually shifting from the search advertising business towards a new valuation framework focused on how much capital is needed for AI investments and how much after-tax cash return these investments can generate. Concurrently, progress on the Gemini large model and Agentic Coding products remains a key area of market attention.
Odaily reported that during Alphabet's earnings call after the market closed on Wednesday Eastern Time, CEO Sundar Pichai stated that market demand for AI infrastructure and AI solutions is very strong. The company's cloud business backlog—signed contracts with revenue yet to be recognized—has grown to $514 billion. Nearly 90% of Fortune 100 companies have already adopted Gemini Enterprise. (Cailianshe)
According to MSX.COM data, GOOGL shares dropped over 3% in after-hours trading. Although its Q2 2026 earnings report showed revenue of $119.8 billion (up 24% year-over-year), the company raised its full-year capital expenditure guidance and hinted at continuing to invest heavily in AI infrastructure, fueling market concerns about capital burn and returns.
Odaily reported that Alphabet's Q2 revenue was $119.8 billion, up 24% year-on-year, exceeding the estimate of $117.02 billion. Q2 operating profit was $40.77 billion, against an estimate of $40.55 billion; Q2 capital expenditure was $44.92 billion, against an estimate of $44.15 billion; Q2 Google Cloud revenue was $24.77 billion, beating the estimate of $22.46 billion; Q2 Google Services revenue was $94.54 billion, slightly above the estimate of $94.32 billion.
