Alphabet Q2 2026 earnings preview: Google Cloud growth, TPU sales and Gemini in focus

When is Alphabet reporting earnings?

Alphabet will report its second-quarter (Q2) 2026 results on Wednesday 22 July, after US market close, with the conference call at 1.30pm Pacific Time / 4.30am GMT+8.

Q1 FY2026 review: cloud revenue surges while record net income gets an equity-gains boost

Alphabet delivered its third consecutive quarter of revenue above the $100 billion mark in Q1, with revenue up 22% YoY to $109.9 billion. Operating income rose 30% to $39.7 billion on a record 36.1% margin.

Google Cloud was the standout: revenue accelerated to $20.0 billion (+63% YoY), the fastest growth amongst major cloud service providers, with operating margin expanding sharply to a record 32.9% from 17.8% and backlog nearly doubling sequentially to a record $462 billion.

Net income surged 81% to a record $62.6 billion and EPS to a record $5.11, but $37.7 billion of other income — including unrealised markup on Alphabet's minority equity stake in Anthropic and SpaceX — drove nearly all of the earnings surprise. Stripped out, EPS would have missed the $2.63 consensus by a cent. Management raised full-year capex guidance to $180–190 billion and flagged a further 'significant increase' for 2027.

Q2 FY2026 preview: can Cloud's growth crown survive a fresh set of entrants?

LSEG consensus projects Q2 revenue of $116.8 billion (+21.1% YoY), a pace similar to Q1's 21.8%. Google Cloud continues to be the growth engine with an anticipated 63% growth. Notably, other bets — where autonomous transportation Waymo sits — is expected to revert to growth after two consecutive quarters of contraction.

Stripping out the equity-driven other income swing, operating income is expected to grow faster than revenue, with margin expanding nearly 3 points to 35.3%, reflecting continued leverage from Cloud's scale-up and efficiency gains management flagged on the Q1 call.

Source: LSEG

Five questions for Alphabet's earnings call

1. Can Google Cloud's growth crown survive new entrants? Google Cloud grew 63% in Q1, ahead of Azure (~40%) and AWS (28%). Meta's newly announced 'Meta Compute' signals a future competitor. The forward guidance on whether the cloud business will be able to sustain the rapid growth that will shape the leadership narrative.
2. Are TPU external-sales converting into actual revenue yet? Alphabet is commercialising its custom AI chips, Tensor Processing Units, by selling capacity directly to external cloud providers and preparing a Blackstone-backed neo-cloud venture that will rent TPU compute directly to AI labs and enterprises from 2027. Management guided that hardware sales would begin contributing later in 2026, with the bulk landing in 2027. Investors will be looking for evidence on whether Alphabet's chip business is becoming a genuine second revenue stream, not just an internal cost edge.
3. How is the capex-fuelled cash burn evolving? Capex rose 107% YoY to $35.7 billion in Q1; FY2026 guidance sits at $180–190 billion, with June's $84.75 billion equity raise earmarked for AI infrastructure, on top of roughly $40 billion raised via debt this year for general corporate purposes. Free cash flow fell 47% YoY in Q1 — whether that compression continues, plus any early word on 2027 scale, is the key risk question.
4. Is Gemini gaining real ground on ChatGPT and Claude? Google's model family has closed the perception gap with OpenAI and Anthropic over the past two quarters, and Gemini 3.5 Pro scheduled to launch on 17 July, gives management a fresh data point to point to. The market will be listening for usage-share metrics — Gemini app MAUs, API adoption, enterprise deals — as the real test of whether that momentum is translating into share stolen from rivals.
5. Is Search's ad engine keeping pace with the AI-driven shift in how people search? With query behaviour moving towards AI Mode/AI Overviews, whether monetisation per query holds up is a question that investors constantly have in mind.

Analyst sentiment: dominated by buy ratings

Wall Street has a positive outlook on the stock. Of 33 analysts tracked by TipRanks, 28 carry a 'buy' rating with 5 holds and no sells. The average 12-month price target for the Class A shares of $428.43 implies 15.5% upside from the 15 July close. The most bullish target stands at $515, while the most conservative sits at $349.94.

Options markets pricing a 5.3% expected move into 22 July.

TipRanks insights

GOOGL technical outlook: positive momentum

Alphabet's share price gained 38% since bottoming at $272.11 on 30 March, outperforming the broader tech-heavy Nasdaq 100 index, but is roughly 9% below its peak.

The stock is currently testing the resistance from the 50-day moving average (MA). A decisive break above the 50-day MA and the pivot point at $376, would open the path of testing the historic high at $408.61. Conversely, disappointing earnings could drive the stock towards immediate support from the 20-day MA near $357.69.

Alphabet Class A daily price chart

The figures stated in this article are based on a snapshot taken on 16 July 2026 unless otherwise stated. Past performance is not indicative of future results.