{"slug": "the-3-biggest-takeaways-from-google-s-q2-earnings-from-ai-spending-to-a-for", "title": "The 3 biggest takeaways from Google's Q2 earnings, from AI spending to a milestone for Gemini", "summary": "Alphabet reported Q2 revenue of $119.8 billion, up 24% year over year, as Google Cloud revenue surged 82% to $24.8 billion and the Gemini app reached 950 million monthly active users, closing in on ChatGPT's 1 billion. The company raised its 2026 capital expenditure forecast to between $195 billion and $205 billion, prioritizing AI infrastructure despite near-term margin pressure.", "body_md": "Google's latest earnings call offered a familiar message: AI is driving growth, and it's also getting [more expensive](https://www.businessinsider.com/jamie-dimon-companies-shoul-use-ai-like-any-other-resource-2026-7).\n\nOn Wednesday, Alphabet reported second-quarter revenue of $119.8 billion, up 24% from a year earlier, while Google Cloud posted another blockbuster quarter as enterprises raced to adopt AI. At the same time, executives made it clear the company is prepared to spend even more to meet surging demand.\n\nHere are the three biggest takeaways from Alphabet's earnings.\n\n## Google is spending more on AI and is willing to sacrifice margins\n\nGoogle is prioritizing long-term AI growth over short-term profitability by doubling down on its [AI buildout](https://www.businessinsider.com/google-q2-2026-earnings-historic-negative-cash-flow-ai-costs-2026-7).\n\nThe company raised its 2026 capital expenditure forecast to between $195 billion and $205 billion, up from a previous outlook of up to $190 billion, saying demand for [AI infrastructure](https://www.businessinsider.com/warren-buffett-warning-interview-berkshire-ai-spending-alphabet-stock-portfolio-2026-7) continues to exceed available capacity.\n\nFinance chief Anat Ashkenazi said during Wednesday's earnings call that the higher spending reflects an accelerated rollout of computing capacity.\n\nGoogle also plans to lean more heavily on third-party cloud providers while it builds out its own infrastructure, a strategy Ashkenazi said will create \"modest margin pressure in the near term\" but help the company \"keep growing our customer base and capture greater overall value.\"\n\n## Google Cloud is becoming the company's AI growth engine\n\nSearch remains Google's largest business, but Cloud is increasingly emerging as its primary AI growth engine.\n\nOver Q2, [Google Cloud](https://www.businessinsider.com/google-clouds-quiet-layoffs-hit-cybersecurity-teams-2026-6) once again delivered the strongest performance across Alphabet's businesses.\n\nRevenue jumped 82% year over year to $24.8 billion, well ahead of analyst expectations, while cloud backlog reached $514 billion, highlighting continued demand from businesses building AI applications.\n\n\"We're still in a supply-constrained environment,\" Ashkenazi said, adding that Google is seeing \"very strong demand both from external cloud customers as well as across the business.\"\n\nAbout 60% of Google's infrastructure spending during the quarter went toward AI servers, with the rest invested in data centers and networking equipment.\n\n## Google's Gemini app is closing in on ChatGPT\n\nGoogle's AI assistant is approaching a milestone, signaling that Google's consumer AI strategy is gaining momentum amid intensifying competition with OpenAI and Anthropic.\n\nThe company said during Wednesday's earnings call that the [Gemini app](https://www.businessinsider.com/google-q2-2026-earnings-gemini-closing-in-chatgpt-1-billion-2026-7) now has 950 million monthly active users, up from about 650 million last October and more than 750 million earlier this year. CEO Sundar Pichai also said during the earnings call that daily active users have tripled over the past year.\n\nThat puts Gemini within striking distance of OpenAI's ChatGPT, which recently reached roughly 1 billion monthly users.\n\nGoogle is also trying to make its AI models cheaper to run. This week, it introduced three new Gemini models, including Gemini 3.6 Flash, which the company says improves coding performance while using fewer tokens, reducing the cost of deploying AI applications.", "url": "https://wpnews.pro/news/the-3-biggest-takeaways-from-google-s-q2-earnings-from-ai-spending-to-a-for", "canonical_source": "https://www.businessinsider.com/3-biggest-takeaways-from-google-second-quarter-earnings-ai-spending-2026-7", "published_at": "2026-07-23 00:08:21+00:00", "updated_at": "2026-07-23 00:22:52.061810+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure", "ai-products", "ai-startups", "large-language-models"], "entities": ["Alphabet", "Google Cloud", "Gemini", "OpenAI", "Anthropic", "Sundar Pichai", "Anat Ashkenazi", "ChatGPT"], "alternates": {"html": "https://wpnews.pro/news/the-3-biggest-takeaways-from-google-s-q2-earnings-from-ai-spending-to-a-for", "markdown": "https://wpnews.pro/news/the-3-biggest-takeaways-from-google-s-q2-earnings-from-ai-spending-to-a-for.md", "text": "https://wpnews.pro/news/the-3-biggest-takeaways-from-google-s-q2-earnings-from-ai-spending-to-a-for.txt", "jsonld": "https://wpnews.pro/news/the-3-biggest-takeaways-from-google-s-q2-earnings-from-ai-spending-to-a-for.jsonld"}}