Alphabet (NASDAQ:GOOG) reported second-quarter revenue of $119.8 billion, up 24% year over year, while operating income rose 30% to $40.8 billion. Google Cloud continued to lead the company’s growth, with revenue climbing 82% to $24.8 billion and cloud backlog reaching $514 billion.
Management also raised its 2026 capital expenditure guidance, citing continued demand for AI infrastructure and additional compute capacity.
Artificial intelligence shaped nearly every discussion during the earnings call.
Executives described Gemini as the technology connecting Google’s cloud platform, developer tools, cybersecurity portfolio, enterprise software, Search, and YouTube.
CEO Sundar Pichai said, “Our AI investments are redefining what’s possible across every part of our business,” while outlining Google’s effort to build one AI platform that serves developers, enterprises, and consumers through a common set of technologies.
Why It Matters: The conversation focused less on individual AI models and more on the systems required to put them to work. Google described custom chips and cloud infrastructure as the foundation for Gemini while connecting the platform with enterprise software, developer tools, and security products. That approach ties AI to the technology organizations already use to build applications and manage their operations.
- Google Cloud Fuels Enterprise AI Growth: Enterprise demand continued to reshape Google Cloud’s business. Revenue climbed 82% year over year to $24.8 billion, pushing cloud backlog to $514 billion as organizations expanded AI workloads and adopted Gemini Enterprise. Google said nearly 90% of Fortune 100 companies now use Gemini Enterprise, with adoption spreading across industries and existing customers continuing to increase their AI deployments.
- Gemini Becomes the Center of Google’s AI Platform: Gemini appeared throughout the earnings call as the common thread connecting Google’s enterprise offerings. More than 9 million developers now build with Gemini each month, while Google’s APIs process roughly 22 billion tokens per minute. Pichai described Gemini as “a key driver of growth,” noting that it is integrated across Google Cloud products including Gemini Enterprise, Google Workspace, data analytics, and cybersecurity.
- Alphabet Invests for the Next Wave of AI Demand: Google is preparing for demand it believes will continue growing. Management raised its full-year capital expenditure outlook to between $195 billion and $205 billion to add compute capacity, even while acknowledging the spending will pressure cloud margins and free cash flow in the near term. Executives said the company is also relying on third-party infrastructure while expanding its own global footprint to keep pace with customer demand.
- AI Changes How People Use Google Products: AI is becoming a larger part of Google’s consumer experience alongside its enterprise business. Search revenue grew 17% as AI Overviews and AI Mode encouraged users to perform more searches, with AI Mode surpassing 1 billion monthly active users. The Gemini app reached 950 million monthly active users, while YouTube introduced Ask YouTube, giving viewers a new way to interact with video content. Pichai added that AI-powered Search experiences now send “billions of clicks to websites every week.”
- Security Becomes Part of Google’s AI Platform: Security featured prominently alongside Google’s cloud and AI announcements. Executives pointed to growing adoption of Google Cloud security offerings, including Wiz and the new CodeMender cyber model, as organizations look to secure AI applications alongside existing environments. Nearly 90% of Fortune 100 companies now use Google Cloud security products, and almost 90% of Wiz customers have adopted AI-powered security capabilities, showing that security is becoming part of Google’s larger AI platform instead of a separate conversation.
Go Deeper -> Alphabet’s Earnings Report – MarketBeat
Our Latest CIO Field Notes
Netflix Uses AI to Increase Output and Cut Production Time
Setting the stage.
AI Efficiency Gains Reshape Work Across JPMorgan Chase
Bots in blue chips.
Trusted insights for technology leaders
Our readers are CIOs, CTOs, and senior IT executives who rely on The National CIO Review for smart, curated takes on the trends shaping the enterprise, from GenAI to cybersecurity and beyond.
Subscribe to our 4x a week newsletter to keep up with the insights that matter.
