Alphabet, Google's parent company, reported double-digit revenue growth for its second-quarter earnings on Wednesday, marking the tech giant's 12th consecutive quarter of massive revenue gains. The better-than-expected results of $119.8bn came despite delays in the release of its powerful AI model Gemini Pro.
Revenue and Earnings Beat Expectations
Alphabet reported earnings of $9.11 per share, surpassing Wall Street's expectations. Revenue came in at $119.8bn, roughly in line with the first quarter of this year, which also saw a rise in revenue. The company revised its yearly capital expenditure forecast to $200bn, with quarterly spending growing 100% year over year.
AI Investments Drive Growth
“Our AI investments are redefining what’s possible across every part of our business,” Sundar Pichai, CEO of Google and Alphabet, said in a statement. Alphabet is already one of the top five most valuable companies in the world, worth about $4.2tn. However, the gargantuan earnings come as Google recovers from delays in its most prominent AI model, Gemini Pro.
Competition in AI Race
Google has been a frontrunner in the AI race, but competitors such as OpenAI and Anthropic are neck-and-neck with the tech giant, prompting analysts to question whether Google can keep up. On Tuesday, Google announced the release of three cheaper AI models into its Gemini suite: Gemini 3.6 Flash, Gemini 3.5 Flash Cyber, and Gemini 3.5 Flash-Lite. The Flash Cyber model is geared toward cybersecurity and patching security vulnerabilities, an area where Google has been seen as lagging.
Cybersecurity Focus and Risks
Cybersecurity has become a major focus for AI models, but the technology also has drawbacks, including vulnerability to exploitation by bad actors. Anthropic and OpenAI have been developing powerful models that experts warn would be disastrous if available to hackers. Late on Tuesday, OpenAI revealed an “unprecedented cyber incident” in which its own AI agent went rogue and hacked a prominent startup. Google said it was taking an “intentional approach” in deploying 3.5 Flash Cyber and it “will be exclusively available to governments and trusted partners”.
Threat from Chinese AI Models
Cheaper Chinese AI models are also threatening Google's top position, including Alibaba's Qwen and Kimi K3 by the startup Moonshot. While demand for Kimi K3 has soared, it has not caused the same Wall Street panic seen with other Chinese models like DeepSeek.
