The shares of Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) climbed 3.87% in Thursday pre-market after its Q2 financial results surpassed analyst expectations. The company attributed the strong performance to a growing demand for cloud services.
What Happened: On Wednesday, Alphabet announced that its Q2 revenue stood at $96.43 billion, outperforming the projected $93.72 billion. The company’s EPS was $2.31, surpassing the anticipated $2.16. This marks the tenth consecutive quarter of Alphabet exceeding analyst expectations.
Alphabet’s EPS rose by 22% year-over-year, with total revenue increasing by 14% year-over-year, driven by strong performance across the business. The company’s cash, cash equivalents, and marketable securities totaled approximately $95.15 billion at the end of the quarter.
Alphabet’s CEO, Sundar Pichai, highlighted the company’s leadership in AI and its positive impact on all business areas. He also noted strong performance in YouTube and subscription offerings, and significant growth in cloud revenues, backlog, and profitability.
Due to the “strong and growing demand” for cloud products and services, Alphabet has raised its CapEx outlook for 2025 to roughly $85 billion.
Why It Matters: Despite Alphabet’s impressive Q2 earnings, the company’s future is still tied to its ability to navigate the AI revolution. Tech analyst Gene Munster noted that Alphabet’s future success hinges on its AI strategy.
Meanwhile, Alphabet’s CEO Sundar Pichai dismissed concerns about an AI talent exodus, stating that the company remains competitive in attracting and retaining top talent. This is crucial as Alphabet’s AI leadership has a significant impact on all its business areas, as highlighted in the Q2 earnings call.
According to Benzinga Edge Stock Rankings, Alphabet has a growth score of 87.24% and a momentum rating of 47.38%. Click here to see how it compares to other leading tech companies.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
