ก่อนถึงรายงานผลประกอบการของกูเกิล ดอยช์แบงก์หนุน: อย่าจับตาดูแค่ Capex ความประหลาดใจที่แท้จริงอาจมาจาก Google Cloud

Original Author: Li Jia

Original Source: Wall Street News

After the US stock market closes on July 22, Google parent company Alphabet will release its Q2 2026 earnings report. The current market trading logic is highly focused on a core proposition: In the AI era, is the continuously expanding capital expenditure (Capex) a heavy burden eroding profits, or a forward-looking realization of future growth?

In a report released on July 20, Deutsche Bank pointed out that although the market still harbors concerns about the slowdown in search business growth, delays in releasing new Gemini models, and continued increases in AI investment, the truly noteworthy variable is not the capital expenditure itself, but the possibility that Google Cloud's revenue growth could significantly exceed current expectations. If cloud business demand materializes as expected, the incremental profits generated over the next few years will be sufficient to cover higher AI investment intensity, leaving room for further upward revision of the company's overall profitability.

For investors, the key focus of this earnings report is not whether Capex continues to rise, but how management defines the demand trend for cloud services, changes in the order backlog, and the pace of future revenue realization. The above signals may determine whether the market will reprice Alphabet's valuation logic under the AI investment cycle.

Google Cloud is the True Variable Determining Valuation

Deutsche Bank's most optimistic outlook centers on Google Cloud.

Analysts raised their Q2 revenue growth forecast for Google Cloud from 65% to 70%, and expect it to further accelerate to 75% in the second half of 2026.

This forecast is based on three judgments. First, demand for AI computing power remains in short supply, with Google recently even leasing some computing resources provided by SpaceX. Second, as of the end of Q1 2026, Google Cloud's backlog of orders had reached $462 billion, a year-over-year increase of 400%. Additionally, some hyperscale cloud providers, including Amazon, have begun to raise prices for certain cloud services.

More importantly, Deutsche Bank believes the market has significantly underestimated Google Cloud's future revenue scale. It projects Google Cloud revenue could reach $190 billion to $195 billion in 2027, while the market consensus is only around $142 billion. Based on a 30% profit margin, this extra revenue alone could contribute approximately $15 billion in GAAP operating profit, equivalent to an increase of about $1 in earnings per share.

Capex Will Continue to Rise, but Financing Capacity is Also Strengthening

Regarding AI infrastructure construction, Deutsche Bank has simultaneously significantly raised its forecast for Alphabet's future capital expenditure. The company previously estimated 2026 capital expenditure at $180 billion to $190 billion and stated that 2027 would see a "significant increase" compared to this year.

Combined with the order backlog, Deutsche Bank estimates that Google needs approximately 11.5GW of computing capacity to meet existing demand; under the baseline scenario for 2027, an additional 10GW is required. Based on a construction cost of roughly $30 billion to $35 billion per GW, Deutsche Bank forecasts 2027 capital expenditure of about $325 billion, higher than the previous forecast of $250 billion; it is expected to further rise to $365 billion to $370 billion in 2028.

However, analysts also pointed out that due to Google's hybrid deployment of TPUs and NVIDIA GPUs, its unit construction costs are expected to be lower than market concerns.

Meanwhile, the company's financing capacity remains ample. This quarter, Alphabet has completed approximately $65 billion to $70 billion in financing, including a $10 billion investment from Berkshire Hathaway, two equity financings totaling about $36 billion, an at-the-market (ATM) offering facility of up to $40 billion, and multi-currency senior note issuances.

As of the end of Q1 2026, the company held approximately $127 billion in cash and investments, along with about $107 billion in unlisted securities; Deutsche Bank estimates that by the end of 2027, the company's cumulative operating cash flow will be approximately $420 billion.

Deutsche Bank believes that Alphabet's current problem is not "excessive Capex," but that the market is overly focused on investment while underestimating the speed of Google Cloud revenue realization.

Search Growth Hasn't Stalled; Ad Budgets Are Shifting to AI

Regarding Google's search business, the biggest market concern stems from AI Overviews potentially changing traditional search traffic patterns.

However, Deutsche Bank's channel checks reveal new shifts in advertiser behavior. While some advertisers maintain their original search budgets, an increasing number of brands are beginning to allocate ad budgets to AI Overviews, simultaneously increasing AI-related ad placements on Google Search and ChatGPT.

At the same time, SimilarWeb data shows that Google's website traffic and page views in Q2 2026 improved compared to Q1. Based on this data, Deutsche Bank maintains its forecast for Google Search revenue growth of 16.5% year-over-year on a constant currency basis in Q2, with Q3 expected to see 14% year-over-year growth.

Analysts believe that even with a slight delay in the release of new Gemini models, current AI models can already continuously improve ad placement efficiency, and the fundamentals of the advertising business have not materially changed.

Gemini Delay Isn't the Key; User Growth Continues

The delayed release of Gemini has become another market focus. Google previously stated at the I/O 2026 conference that Gemini 3.5 Pro would be launched subsequently, but as of now, the new model has not been officially released.

Nevertheless, Deutsche Bank believes the model release timeline hasn't changed the user growth trend. SimilarWeb data indicates that Gemini's web traffic and page views continued to grow in Q2, albeit at a slower pace. Sensor Tower data shows that Gemini App downloads have declined from their peak in 2025, but total sessions continue to grow.

In a horizontal comparison, ChatGPT remains in the lead, but its session volume has largely stabilized over the past 12 months; Meta AI has seen significant growth since launching Muse Spark; Grok's downloads and session volume have both declined this year.

Therefore, Deutsche Bank believes the adjustment to Gemini's release timeline is a short-term event and will not alter Alphabet's long-term AI competitiveness.