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Alphabet's Google doubles Q2 capex to record $44.9 billion, boosting AI infrastructure and cloud profit margins
Google’s computing costs are skyrocketing. Alphabet’s Q2 financial report reveals capital expenditures doubled year-over-year to a record $44.92 billion. At this rate, annualized spending nears $180 billion. Yet, the true narrative is the accelerating revenue engine driving this investment.
Q2 revenue grew 24% year-over-year to $119.8 billion, beating analyst estimates of $116.9 billion. Google Cloud led the charge, with revenue surging 82% to $24.8 billion. Operating profit margins nearly doubled to 35.6%, and backlogs hit $514 billion. Gemini also advanced, reaching 950 million monthly active users and processing 22 billion tokens per minute via its API. As cloud demand grows alongside profit margins, this success directly justifies Google’s decision to double capital spending.
This AI infrastructure boom extends beyond Google. Morgan Stanley predicts hyper-scale cloud providers’ capital expenditures will rise from $800 billion in 2026 to $1.2 trillion in 2027. Goldman Sachs forecasts $76.5 billion for 2026, climbing to $1.6 trillion by 2031. McKinsey’s projection is even steeper, estimating total related capital expenditures will reach $6.7 trillion by 2030, with AI-focused data centers absorbing $5.2 trillion. When a company doubles quarterly capex while doubling cloud profit margins, it is clearly investing in an entire AI-driven infrastructure cycle, not just short-term returns.
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Google’s computing costs are skyrocketing. Alphabet’s Q2 financial report reveals capital expenditures doubled year-over-year to a record $44.92 billion. At this rate, annualized spending nears $180 billion. Yet, the true narrative is the accelerating revenue engine driving this investment.
Q2 revenue grew 24% year-over-year to $119.8 billion, beating analyst estimates of $116.9 billion. Google Cloud led the charge, with revenue surging 82% to $24.8 billion. Operating profit margins nearly doubled to 35.6%, and backlogs hit $514 billion. Gemini also advanced, reaching 950 million monthly active users and processing 22 billion tokens per minute via its API. As cloud demand grows alongside profit margins, this success directly justifies Google’s decision to double capital spending.
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Google has officially rolled out conversational AI voice capabilities, driven by Gemini, across Gmail, Docs, and Keep. These features are branded as Gmail Live, Docs Live, and Keep Live, respectively.Users can now interact with their AI assistant thr
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