Google parent Alphabet surprises with capital spending boost after earnings beat
Alphabet on Wednesday cited massive demand for its cloud computing services as it hiked its capital spending plans for the year to about $85 billion and predicted a further increase next year.
The search giant strongly beat Wall Street estimates for quarterly revenue and profit on the back of new AI features and a steady digital advertising market.
Revenue growth was driven by
Cloud's sales, which surged nearly 32%, well above estimates for a 26.5% increase.
"With this strong and growing demand for our Cloud products and services, we are increasing our investment in capital expenditures." CEO
Sundar Pichai
said in an earnings release.
Shares of the company, which have risen more than 18% since its previous earnings report in April, dipped initially in extended trading after the report before rallying as executives shared details about strong cloud demand on a call with analysts.
But investors were surprised by the planned capital spending increase.
"I don't think anyone was expecting a change to that 2025 capex guide," said Dave Wagner, portfolio manager at Aptus Capital Advisors. "Google had an amazing quarter. It was an easy beat, and it was just offset by this $10-billion increase in capex."
Capital spending is expected to increase further in 2026 due to demand and growth opportunities, Chief Financial Officer Anat Ashkenazi said on the call.
Ashkenazi added that while the pace of server deployment has improved, Alphabet continues to face more customer demand for its cloud services than it can supply.
Google had earlier pledged about $75 billion in capital spending this year, part of the more than $320 billion that Big Tech is expected to pour into building AI capabilities.
CLOUD GAINS
The rise of artificial intelligence technologies has propelled demand for cloud computing services. Google Cloud still trails Amazon's AWS and Microsoft's Azure in total sales, but has tried to gain ground by touting AI offerings, including its in-house TPU chips that rival Nvidia's GPUs.
The business segment grew its quarter-over-quarter customer count by 28%, Pichai said on the call.
"The comprehensiveness of our AI portfolio, the breadth of our offerings, both providing our models on GPUs and TPUs for our customers, all of that has been really driving demand," he said. In a huge win for Alphabet, ChatGPT maker OpenAI recently added Google Cloud to its list of cloud capacity suppliers, as Reuters exclusively reported in June, in a surprising collaboration between two companies that are competing head-to-head in AI. It also marked OpenAI's latest move to diversify beyond its major backer Microsoft.
The capex increase nevertheless raises concerns about Alphabet's pace of monetization and its impact on near-term profitability, Investing.com senior analyst Jesse Cohen said.
Alphabet and its peers have defended their aggressive AI spending amid rising competition from Chinese rivals and investor frustration with slower-than-expected payoffs, saying those massive investments are necessary to fuel growth and improve their products.
AI RACE
Google Search's artificial intelligence features such as AI Overviews and AI Mode are also helping the company boost engagement and tackle rising competition from chatbots such as ChatGPT that have surged in popularity. AI Mode has grown to 100 million monthly active users just two months after Google announced the start of its large-scale rollout during its annual developer conference. Google's own ChatGPT competitor, called Gemini, has more than 450 million monthly users, Pichai said.
Google's advertising revenue, which represents about three-quarters of the tech major's overall sales, rose 10.4% to $71.34 billion in the second quarter, beating expectations for $69.47 billion, according to data from LSEG.
"Hopefully, this will damper concerns by the investment community that has been worried that products like OpenAI/ChatGPT could be having an impact on Google's Search query growth," said Dan Morgan, senior portfolio manager at Synovus Trust.
Alphabet reported total revenue of $96.43 billion for the second quarter ended June 30, compared with analysts' average estimate of about $94 billion, according to data compiled by LSEG.
The company reported profit of $2.31 per share for the period, beating estimates of $2.18 per share, according to LSEG data.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hindustan Times
4 minutes ago
- Hindustan Times
Google Maps is crashing while navigating for public transit routes, users report
If Google Maps has suddenly started crashing every time you check transit directions, you're not alone. Over the past few hours, users across Reddit, Google's support forums and tech publications have reported a frustrating bug that shuts down the app when searching for bus, metro or train routes. Users report Google Maps crashing when checking public transport routes(Pexels) Google Maps crashing during transit searches: What we know so far According to early reports, first spotted on Reddit, the bug kicks in only when users try to search for public transport directions. Everything else, including driving, walking and biking routes, works just fine. But the moment you switch to transit, the app crashes back to the home screen. Android Police was able to replicate the crash on version 25.30.00.78516346 of the app, pointing to the latest update as a possible trigger. What's odd is that not everyone is affected. Some people on the same version of the app say it's working perfectly fine. Others, on Pixel, Samsung and even Redmagic phones are seeing consistent crashes. A quick look at Downdetector shows a slight rise in Google Maps-related complaints, though it hasn't exploded into a widespread outage just yet. Apple Maps and CarPlay users are noticing glitches too Interestingly, the issue isn't limited to Android users. iPhone users who rely on CarPlay have also reported glitches, most notably, the app giving incorrect or misleading directions. While it's not clear if the iOS related issues are linked to the same bug, the timing is suspicious. There's also no official word from Google yet. No acknowledgement on their Maps status page, and no mention of a fix coming soon. That's not ideal, especially since so many users rely on Maps for their daily commute. Google Maps alternatives while the bug is fixed While there's no guaranteed fix right now, one workaround seems to be helping some Android users, using Google Maps in Incognito Mode. You can turn this on by tapping your profile icon in the app and selecting 'Turn on Incognito mode.' It's not perfect, your trips won't be saved, but at least the app won't crash. Other than that, you might want to consider using alternatives like Citymapper, Moovit or Apple Maps until this gets sorted. Sadly, rolling back to an older version of Google Maps doesn't seem to work in every case. The issue has not been officially addressed Right now, the bug hasn't been officially addressed, but it's starting to gain visibility online. If you're affected, it helps to report your experience include your device, location, and app version on Google's support forums. The more noise users make, the quicker we might see a patch.
Hindustan Times
4 minutes ago
- Hindustan Times
Google Pixel 10 series images leak again ahead of launch, new colours tipped
Google has already announced that the Google Pixel 10 series will launch on 21 August in the Indian market. However, regarding the official reveals, the company has only shown a small teaser of the Pixel 10 Pro in the new Moonstone colourway. Google has kept the other Pixel 10 series models under wraps so far. Google Pixel 10 series image as posted by Evan Blass on X(Evan Blass) Although we have seen multiple leaks showing the Pixel 10 in different colourways, another leak from Evan Blass, a veteran tipster in the tech community, has revealed what appear to be the official renders of the Pixel 10 family. This includes the Pixel 10 Pro Fold (if that will be its name), the Pixel 10 Pro, the Pixel 10 Pro XL and the new Pixel 10, which seems to be the most interesting model this time, alongside the new Pixel Buds and the Pixel Watch 4. Here are the details. New Colours Tipped Again Based on images shared by Blass, we can confirm that there will be four different Pixel 10 series models this time: the Pixel 10 Pro Fold, the Pixel 10 Pro XL, the Pixel 10 Pro and the regular Pixel 10. The images also confirm that the base Pixel 10 will ship with three cameras: which could be a wide, an ultra-wide and a telephoto lens, making the camera setup more versatile. However, reports suggest that the sensors could be changed, but this, of course, remains to be seen. We also get to see the different colourways that were leaked by Android Headlines a few days ago, including a new blue for the Pixel 10, a light green (could be called Jade) for the Pixel 10 Pro, and the Moonstone colourway for the Pixel 10 Pro Fold. As for the Pixel Watch 4, it looks identical to the previous version. It seems Google is following Apple's strategy of maintaining a distinct aesthetic so that people associate the look with Pixel Watches, hence the repeated design. Considering that multiple tipsters have now shared the same renders, and these latest ones are of a much higher resolution, it reinforces the same details, giving us confidence about what to expect from the Pixel 10 series on 21 August in India. What More Do We Know? The Pixel 10 series will be powered by the Tensor G5 chipset, which will reportedly be manufactured by TSMC on a 3nm process. This is expected to bring both performance and efficiency upgrades. Further, based on multiple reports, the design, including that of the Pixel 10 Pro Fold, is expected to remain largely the same. Google launched this new design language last year, featuring flat sides and a disconnected camera module that floats on the top half of the phone's back.
Time of India
5 minutes ago
- Time of India
Chinese consumer complaints show widespread padding of car sales figures
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Consumer Anger Tired of too many ads? Remove Ads Dealer complaints A tactic used by Chinese automakers and dealers to inflate car sales has grown increasingly common in recent years in response to a bruising price war in the world's largest auto market, a Reuters analysis of consumer complaints has found. Earlier this month, Reuters reported EV brands Neta and Zeekr had arranged for cars to be insured before buyers purchased them, a scheme that effectively inflates sales numbers and gives the appearance the companies were hitting periodic targets. But the controversial tactic was not limited to the two companies and was employed elsewhere in the industry, according to a Reuters review of 97 separate consumer complaints published on three widely used Chinese more than a dozen cases, buyers said they were informed by dealerships that the practice was specifically designed to meet sales allegations cover some of China's largest domestic and foreign brands by sales volume, including homegrown champion BYD and Toyota Volkswagen and Buick. The three foreign brands operate their China businesses in partnerships with state-owned giants GAC and SAIC Motor the earliest complaints date back to 2021, the majority were published this year and last as a price war squeezed an industry crucial to China's export-driven reviewed complaints posted on a third-party site used for consumer dispute resolutions, and two other similar sites. The platforms require owners to verify their identity and submit proof of their most of the cases reviewed, the automakers responded publicly, saying they sought to resolve was not able to independently verify the complaints or their is not clear what portion of China's car sales were inflated by the insurance which is a China joint venture partner for Volkswagen and Buick-owner General Motors, said it is committed to providing users with high-quality and standardised sales services but did not practice effectively disguises how much inventory automakers actually held, said Yale Zhang, managing director at consultancy Automotive Foresight."That could lead to a misjudgment of monthly demand within the industry and result in increased production scheduling," Zhang 2021 and 2025, 48 separate buyers said on that they purchased new cars only to later discover they were already insured by the of the buyers said they felt deceived by the dealerships, especially when they realised the insurance on their cars was registered in other there were 26 separate complaints published between 2021 and 2025 on the 315 auto consumer complaint platform, run by the state-owned China Internet Information 23 were posted between 2022 and 2025 on Black Cat, a widely used consumer complaint platform run by tech firm 14 complaints on the three platforms, buyers of BYD-, Neta-, Toyota-, Buick- and Chevrolet-branded cars said they were told by dealers the practice was aimed at booking sales early to meet complaint, filed in December against a SAIC GM dealer on alleged the automaker required 60 cars to be insured without buyers to meet sales complaint on filed in April alleged a BYD store in Shaanxi told a buyer it had 12 cars insured in a batch to inflate sales last of Li Auto, Changan, FAW-Volkswagen and Geely also reported cars being insured pre-purchase. Volkswagen Group China spokesperson said it refused to boost sales figures through insurance and that complaints would be Reuters identified 29 official media reports from 2020 to 2025 that detailed complaints against dealers of major brands, including BYD and Changan and foreign brands Volkswagen, GM, Toyota, Nissan and Honda , run by their joint ventures with state-owned Chinese media outlets, across 15 provinces and cities, are controlled and owned by the regional nine cases, dealers representing FAW Hongqi, SAIC Roewe, SAIC VW, Dongfeng Nissan, GAC Toyota, GAC Honda and SAIC GM told official media that insuring unsold vehicles was for booking purchases early to meet sales targets.A Honda spokesperson said that GAC Honda prohibits dealers from taking out compulsory insurance before selling new cars and that any dealers found doing so would be dealt with Hongqi said it does not use insurance plans to pre-confirm sales and any such activity was not official company China said it does not require wholesale vehicles to be insured pre-purchase and that it counts deliveries, not insurance, in its sales GAC Toyota, Geely, Changan, Nissan and Li Auto did not respond to requests for also identified five articles published by Chinese courts between March 2023 and March 2025 about consumers taking dealers to court for concealing pre-purchase car insurance. In three of those, the court ruled for the buyers who demanded compensation. Verdicts for the other two were not publicised.'ZERO MILEAGE' Vehicles booked as sold before reaching buyers are called "zero-mileage used cars" in China. The practice emerged out of the cut-throat competition as the market deals with a years-long price war caused by chronic than 100 car brands are competing intensely to survive consolidation, deepening pressure to bolster sales and take market and investors that track the industry use two sets of figures reported by automakers to the industry association show sales from automakers to dealers, while retail data compiled from mandatory traffic insurance registrations show the number of sales to of selling cars with existing insurance policies date back to 2016 when a Cadillac buyer told a regional radio programme he found the car was insured before his practice appears to have picked up after the price war started in early 2023, when several brands led by Li Auto started posting weekly sales rankings on social media based on insurance China Association of Automobile Manufacturers has criticised such postings as unreliable and this month blamed them for intensifying "vicious" competition.
