From 24/7 Wall St. · Alex Sirois · · 1m 10s
Alphabet Cloud Growth and AI Dominance
Alphabet's cloud and AI growth outpace capex fears, keeping investors buying.
In brief
Alphabet's cloud and AI growth outpace capex fears, keeping investors buying. Alphabet's cloud revenue surged 82% in Q2 2026 to $24.77 billion, with AI demand driving growth despite high capital expenditures. Originally reported by 24/7 Wall St..
Alphabet's Cloud Surge
Google Cloud revenue grew 34% in Q3 2025, 48% in Q4, 63% in Q1 2026, and 82% in Q2 2026 to $24.77 billion.
AI Demand Accelerates
Nearly 90% of Fortune 100 use Gemini Enterprise, processing 22 billion API tokens per minute.
Cloud Backlog Doubles
Cloud backlog nearly doubled to over $460 billion in Q1 2026, with customers signing long commitments.
Operating Margin Strengthens
Operating margin expanded by 2 points to 34%, with operating income rising 30.38% to $40.77 billion.
Investor Confidence
Alphabet shares returned 39.48% over the past year, outpacing Microsoft's 5.94% and Amazon's 18.18%.
Capex Concerns
Q2 capex reached $44.92 billion, up 100.14%, pushing free cash flow to negative $5.86 billion.
Why Keep Buying
Alphabet's cloud growth and AI demand outpace capex risks, with strong operating cash flow and low debt-to-equity.
In short
Alphabet's cloud revenue surged 82% in Q2 2026 to $24.77 billion, with AI demand driving growth despite high capital expenditures.
