Wall Street cheered the performance of Google's cloud computing business in Alphabet's second quarter earnings report as revenue growth accelerated and other key financial metrics improved. Google stock climbed Thursday as Wall Street shrugged off Google's increased capital spending in 2025 largely because of the cloud computing results.
Reported after the market close on Wednesday, Google earnings for the quarter ending June 30 rose 22% to $2.31 per share. In Q2, Google's gross revenue rose 14% to $96.43 billion.
Find Top-Rated Stocks To Buy And Watch
Further, Google reported cloud computing revenue of $13.62 billion, up 32% from a year earlier, versus estimates of $13.14 billion. Artificial intelligence-related workloads — training AI models and processing AI apps — were a big driver of cloud revenues.
Google said it expects capital spending to reach $85 billion in 2025, up from earlier guidance of $75 billion.
Much of the capital spending will go to computer servers and other AI-related infrastructure. With the updated guidance, capital spending is expected to jump 62% in 2025.
At JPMorgan, analyst Doug Anmuth expects Google's cloud computing unit to become a stronger rival versus Amazon.com and Microsoft.
"Google Cloud is nearly half the size of AWS and two-thirds the size of Azure, while growing twice as fast as AWS and nearly on par with Azure. We believe the combination of strong AI-driven Cloud demand and accelerating backlog makes Google Cloud a bigger driver of the (Google stock) bull case going forward."
Microsoft reports fiscal Q4 earnings on July 31. Amazon reports Q2 earnings on Aug. 1.
Cloud Computing Business Delivers
"Google Cloud absolutely crushed it — accelerating to 32% year-over-year with backlog up 38%," said Oppenheimer analyst Jason Helfstein in a report.
At William Blair, analyst Ralph Schackart said in a report: "Cloud continues to operate in a tight supply environment. The company expressed confidence in its cloud product with the number of $250 million deals doubling year-over-year. Moreover, in the first half of 2025, it signed the same number of deals worth more than $1 billion than it did in the full year of 2024, and the number of new Google Cloud Platform customers grew by 28% sequentially."
At Jefferies, analyst Brent Thill said: "Google Cloud Platform grew much faster than Cloud overall. (Cloud revenue includes sales of "Workplace" productivity software.) Tight supply is expected into 2026 vs. prior expectation of easing in late 2025. In addition, Cloud operating margin expanded again to 20.7% from 17% to 18% in prior three quarters and 11% in Q2 2024."
RBC Capital analyst Brad Erickson also was upbeat on the Google Q2 earnings report.
"Literally everything on Cloud was good," he said. "Growth accelerated, the backlog grew 600 basis points faster than revenue, management pointed to persistent capacity constraints several times (even into 2026) and still the company took the capex guide up — all of which points to further acceleration and upside potential."
On the stock market today, Google stock gained over 1% to 192.68 in morning trading. With a strong July, Google stock is about even in 2025.
Google is among AI stocks to watch.
Google Stock Technical Ratings
Heading into the Google earnings report, the tech giant was at the edge of a buy zone a cup-with-handle base. The buy point is a 181.23.
On a weekly chart, GOOGL stock is working toward a 207.05 cup-base entry.
Also, Google stock owns an Accumulation/Distribution Rating of B. That institutional ownership rating analyzes price and volume changes in a stock over the past 13 weeks of trading. A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.
Further, Alphabet stock holds an IBD Composite Rating of 93 out of a best possible 99, according to IBD Stock Checkup. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, quantum computing, cybersecurity and cloud computing.
