Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Alphabet’s Q2 FY2026 was defined by explosive Google Cloud growth and a staggering net income figure distorted by $99 billion in unrealized equity gains from SpaceX and a private company. Revenue jumped 24% driven by an 82% surge in Google Cloud, which began recognizing revenue from TPU system sales, and steady 15% gains in Google Services. Underlying operating momentum was strong, with operating margin expanding to 34% on cost leverage, but heavy AI infrastructure investments pushed capital expenditures to $44.9 billion, resulting in negative free cash flow of $5.8 billion. The period also saw a $49.6 billion equity raise to fuel further compute expansion, highlighting the tension between ambitious growth and rising capital intensity.
Revenue
$119.8B
+24.23% YoY
EPS (Diluted)
$9.11
+294.37% YoY
Operating Income
$40.77B
+30.38% YoY
Source: SEC XBRL
Alphabet (GOOGL) reported Q2 FY2026 revenue of $119.8B, up 24.2% year over year. Operating margin was 34.0%, up 1.6 points from 32.4% a year earlier. GOOGL's fiscal Q2 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 2 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 2.85 | 2.98 | Miss -4.4% |
| Mar 2026 | 2.62 | 2.71 | Miss -3.1% |
| Dec 2025 | 2.82 | 2.71 | Beat +4.2% |
| Sep 2025 | 3.10 | 2.40 | Beat +29.4% |
Adjusted (non-GAAP) EPS of $2.85 versus the $2.98 analyst consensus — a -4.4% miss for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $9.11.
Compiled by AI from 10-Q Item 2 of this filing
Google Cloud revenues surged to $24.8 billion, up 82% year-over-year, primarily from infrastructure and platform services; the company also began recognizing revenue from the sale of TPU systems in Q2 2026.
Source: 10-Q Item 2 MD&A
Other income, net included $99 billion in net gains on equity securities, largely unrealized gains from SpaceX and a private company, causing net income to nearly quadruple to $112.2 billion.
Source: 10-Q Item 2 MD&A
In June 2026, Alphabet raised $49.6 billion through a combination of Class A, Class C, and mandatory convertible preferred stock, with proceeds intended for scaling AI infrastructure and global compute.
Source: 10-Q Item 2 MD&A
Capital expenditures reached $80.6 billion for the first half of 2026, nearly double the prior year, and the company expects to significantly increase investment in technical infrastructure, including servers and data centers.
Source: 10-Q Item 2 MD&A
A $2.1 billion charge was accrued for a Stockholm court decision in a private antitrust action, with $1.5 billion hitting general and administrative expenses and $581 million recognized in other income, net.
Source: 10-Q Item 2 MD&A
Compiled by AI from 10-Q Item 1A of this filing · 2 high, 3 medium, 0 low
Alphabet is significantly expanding investments in AI-optimized infrastructure, custom TPUs, and AI integration across products, but these initiatives may not be commercially viable, could incur unanticipated liabilities, or divert resources from current operations.
Source: 10-Q Item 1A Risk Factors
Recent equity and debt issuances, ongoing capital needs for AI infrastructure, and large commercial agreements (including guarantees and backstops) increase financial risk, could dilute shareholders, and may depress stock prices or reduce flexibility.
Source: 10-Q Item 1A Risk Factors
Global regulations like GDPR, DMA, and new US state laws impose strict data use and portability obligations, with AI-related data processing inviting further regulatory scrutiny and enforcement actions that could harm the business.
Source: 10-Q Item 1A Risk Factors
The ATM program allows for potential sale of up to $40 billion in shares, and conversions of mandatory convertible preferred stock or settlement of dividends in shares could dilute existing stockholders and pressure stock prices, while hedging activity may increase volatility.
Source: 10-Q Item 1A Risk Factors
The company has discretion over the timing and amount of share buybacks, and any suspension could exacerbate stock declines; common stock dividends are not guaranteed, while required preferred stock dividends reduce cash or cause dilution.
Source: 10-Q Item 1A Risk Factors
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 119.80 $B | 96.43 $B | +24.23% |
Cost of Revenue $B | 45.94 $B | 39.04 $B | +17.68% |
Operating Income $B | 40.77 $B | 31.27 $B | +30.38% |
Net Income $B | 112.19 $B | 28.20 $B | +297.90% |
EPS (Basic) $ | 9.23 $ | 2.33 $ | +296.14% |
EPS (Diluted) $ | 9.11 $ | 2.31 $ | +294.37% |
R&D Expense $B | 18.22 $B | 13.81 $B | +31.95% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
Google parent Alphabet delivered a standout Q1 2026, with revenue surging 21.8% YoY to $109.9B and net income nearly doubling (+81.2%) to $62.6B, driven by strong advertising and cloud momentum alongside a dramatic expansion of the balance sheet.
Alphabet (GOOGL) delivered a strong fiscal year 2025 with revenue growing 15.1% to $402.8B and net income surging 32.0% to $132.2B, driven by robust advertising and cloud performance, though long-term debt jumped 309% to $49.1B reflecting aggressive AI infrastructure investment.
Other companies in Interactive Media & Services