{"id":19584,"date":"2025-07-24T03:44:09","date_gmt":"2025-07-24T03:44:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/19584\/"},"modified":"2025-07-24T03:44:09","modified_gmt":"2025-07-24T03:44:09","slug":"google-parent-alphabet-beats-wall-streets-quarterly-revenue-estimates","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/19584\/","title":{"rendered":"Google parent Alphabet beats Wall Street\u2019s quarterly revenue estimates"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Shares of Google parent company Alphabet, which have risen more than 18 per cent since its previous earnings report in April, were down 1 per cent in extended trading.Carlos Barria\/Reuters<\/p>\n

Alphabet Inc. GOOGL-Q<\/a> on Wednesday cited massive demand for its cloud computing services as it hiked its capital spending plans for the year to about US$85-billion and predicted a further increase next year.<\/p>\n

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.<\/p>\n

Revenue growth was driven by Google Cloud\u2019s sales, which surged nearly 32 per cent, well above estimates for a 26.5-per-cent increase.<\/p>\n

\u201cWith this strong and growing demand for our Cloud products and services, we are increasing our investment in capital expenditures.\u201d CEO Sundar Pichai said in an earnings release.<\/p>\n

Shares of the company, which have risen more than 18 per cent 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.<\/p>\n

But investors were surprised by the planned capital spending increase.<\/p>\n

\u201cI don\u2019t think anyone was expecting a change to that 2025 capex guide,\u201d said Dave Wagner, portfolio manager at Aptus Capital Advisors. \u201cGoogle had an amazing quarter. It was an easy beat, and it was just offset by this $10-billion increase in capex.\u201d<\/p>\n

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Capital spending is expected to increase further in 2026 due to demand and growth opportunities, Chief Financial Officer Anat Ashkenazi said on the call.<\/p>\n

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.<\/p>\n

Google had earlier pledged about US$75-billion in capital spending this year, part of the more than US$320-billion that Big Tech is expected to pour into building AI capabilities.<\/p>\n

The rise of artificial intelligence<\/a> technologies has propelled demand for cloud computing services. Google Cloud still trails Amazon\u2019s AWS and Microsoft\u2019s Azure in total sales, but has tried to gain ground by touting AI offerings, including its in-house TPU chips that rival Nvidia\u2019s GPUs.<\/p>\n

The business segment grew its quarter-over-quarter customer count by 28 per cent, Pichai said on the call.<\/p>\n

\u201cThe 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,\u201d 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\u2019s latest move to diversify beyond its major backer Microsoft<\/a>.<\/p>\n

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The capex increase nevertheless raises concerns about Alphabet\u2019s pace of monetization and its impact on near-term profitability, Investing.com senior analyst Jesse Cohen said.<\/p>\n

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.<\/p>\n

Google Search\u2019s 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\u2019s own ChatGPT competitor, called Gemini, has more than 450 million monthly users, Pichai said.<\/p>\n

Google\u2019s advertising revenue, which represents about three-quarters of the tech major\u2019s overall sales, rose 10.4 per cent to US$71.34-billion in the second quarter, beating expectations for US$69.47-billion, according to data from LSEG.<\/p>\n

\u201cHopefully, this will damper concerns by the investment community that has been worried that products like OpenAI\/ChatGPT could be having an impact on Google\u2019s Search query growth,\u201d said Dan Morgan, senior portfolio manager at Synovus Trust.<\/p>\n

Alphabet reported total revenue of US$96.43-billion for the second quarter ended June 30, compared with analysts\u2019 average estimate of about US$94-billion, according to data compiled by LSEG.<\/p>\n

The company reported profit of US$2.31 per share for the period, beating estimates of US$2.18 per share, according to LSEG data.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Shares of Google parent company Alphabet, which have risen more than 18 per…\n","protected":false},"author":2,"featured_media":19585,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-19584","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/19584","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=19584"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/19584\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/19585"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=19584"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=19584"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=19584"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}