Google parent Alphabet (GOOG, GOOGL) will report its second quarter earnings after the bell on Wednesday as Wall Street prepares to get its latest look at how hyperscalers are monetizing their vast investments in artificial intelligence.
Investors have recently pulled back on the AI trade as they continue to digest massive spending on data centers and chips to power their AI platforms. At the same time, tech companies have repeatedly stated that they are capacity-constrained, with demand for computing power outstripping available supply.
Alphabet's Google, like its AI rivals, is also under constant pressure to release ever more powerful AI models. Any delay could give a challenger the space it needs to outmaneuver the competition.
According to Bloomberg, Google has delayed its Gemini 3.5 Pro model over concerns related to its capabilities compared to other leading models.
Google, however, pushed back on the report.
"We're shipping quickly across a wide range of models while keeping them highly cost-effective for customers," a spokesperson told Yahoo Finance. "We're currently testing 3.5 Pro, an upgraded Flash model, and other models with partners, and we're productively engaged with the U.S. government."
Alphabet stock has fared better than that of its competitors, rising roughly 4% over the past three months, though shares are off their 52-week high.
Amazon (AMZN) stock has been about flat over the past three months, while Meta (META) has declined nearly 6%. Microsoft (MSFT) stock is off 5%.
Alphabet also got a boost on Monday after The Information reported Google is developing a new chip that could increase efficiency when running Gemini. The chip, codenamed Frozen v2, would include bits of Gemini, cutting processing time.
For the second quarter, Alphabet is expected to report earnings per share (EPS) of $2.95 on revenue of $116.98 billion. Revenue excluding traffic acquisition costs is anticipated to be $101.5 billion. Alphabet saw EPS of $2.31 on revenue of $96.4 billion during the same period last year. Google's Cloud Platform (GCP) revenue should hit $22.4 billion, up 64% from the $13.6 billion the company reported in Q2 2025. GCP has been a major growth driver for Alphabet over the past several quarters as customers have leaned into the company's AI offerings.
Remaining performance obligations (RPOs), or contracts that Google still has to deliver on, are expected to top $488.1 billion, up 351% from Q2 last year.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X at @DanielHowley.
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