Alphabet's Q2 revenue beats estimates on Cloud, Search strength 

Overview

• U.S. search and cloud giant's Q2 revenue rose 24% yr/yr, beating analyst expectations

• EPS surged 294% to $9.11, driven by net unrealized gains on equity securities

• Company declared quarterly dividends for both preferred and common shares

Outlook

• Company did not provide specific financial guidance for the current or future periods

Result Drivers

• GOOGLE CLOUD GROWTH - Google Cloud revenue rose 82%, driven by demand for AI infrastructure, enterprise AI solutions, and core GCP services

• AI ADOPTION - Company cited wide adoption of Gemini AI models and applications, including strong enterprise and consumer uptake, as a key driver

• SEARCH AND YOUTUBE ADS - Google Services revenue rose 15%, led by 17% growth in Search and 13% in YouTube ads, with AI features driving Search query growth

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 54 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the online services peer group is "buy"

• Wall Street's median 12-month price target for Alphabet Inc is $435.00, about 25.3% above its July 21 closing price of $347.15

• The stock recently traded at 24 times the next 12-month earnings vs. a P/E of 24 three months ago

Reuters Recommended Reads

• July 21 - Google updates lightweight Gemini models, but flagship still delayed

• July 22 - AI investment boom puts Big Tech's free cash flow under pressure

• July 21 - China considers tighter export controls on AI models and chips, FT reports

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)