Alphabet Earnings Preview: Is the $190 Billion AI Bet Beginning to Pay Off? | Investing.com

Alphabet (NASDAQ:) will release second-quarter results today after market, giving Wall Street the first glimpse of big tech’s earnings.

Analysts forecast the company’s quarterly capital expenditure will jump 101% to $45.1 billion as it scales AI infrastructure, while Google Cloud revenue is expected to climb 63% to $20 billion.

Key Highlights:

• Alphabet raised its 2026 capex guidance to $180–$190 billion and has already tapped an $84.75 billion equity raise plus about $40 billion in new debt to fund AI infrastructure this year.
• The key question entering earnings is whether Google Cloud can sustain 60%+ growth while free cash flow which fell 47% year‑over‑year in Q1 remains strained by record AI spending.
• Shares have climbed significantly from March lows near $186, peaking at an all-time close of $402.38 in mid‑May before retreating to the $340–$350 range ahead of the earnings report.
• Alphabet’s April 29 results raised the bar; revenue surged 22% year‑over‑year to $109.9 billion, the fastest growth in two years and adjusted EPS of $2.62 roughly matched expectations.
• In Q1, Search and other revenue rose 19% to $60.4 billion, accelerating despite AI chatbots and Overviews changing search behavior. Paid subscriptions across Alphabet products hit 350 million, and Gemini Enterprise paid seats grew 40% quarter‑over‑quarter.
• Cloud revenue surged 63% year‑over‑year to $20 billion in Q1. Its fastest pace in years while operating income nearly tripled as margins widened from 17.8% to 32.9%, outpacing Microsoft’s mid‑30s Azure growth and Amazon’s 19% AWS growth in comparable quarters.
• GOOGL is building a new AI accelerator chip for cloud servers that would embed parts of its Gemini model in hardware. Code-named “Frozen v2” to create a more powerful, specialized server accelerator, according to The Information.
• In May, Google unveiled Ironwood, its eighth-generation TPUs, designed for both AI model training and inference workloads.
• Wall Street analysts will seek an update on the availability of Google’s next‑generation Ironwood TPU, which customers include AI model maker Anthropic.
• On Tuesday, Google unveiled three new AI models — including its most powerful Flash model yet and a cybersecurity-focused system — intensifying competition with OpenAI and Anthropic in the fast-evolving AI market.
• HSBC analysts said they will look for clues on whether customers are cutting AI costs by using cheaper models and how rising hardware prices could affect Alphabet’s spending plans.
• A reported delay to Gemini Pro 3.5 grabbed attention before earnings, though BMO and others downplayed it. Q2 results will show whether AI search features boost ad revenue or are just costly defense against rivals.

Analysts Expectation:

• A Wells Fargo analyst reiterated an “overweight” rating on Alphabet A (GOOGL) and raised the price target to $438 from $416.
• Wolfe Research reiterated an Outperform rating on Alphabet Inc. (GOOGL) with a $460 price target.
• A BMO Capital analyst reaffirmed an “Outperform” on (GOOGL) and raised the price target to $455 from $435.

GOOGL Q2 2026 earnings after market (4:03 pm ET) Wednesday, July 22, 2026

Expected Move by Option Expiration:

Options pricing implies Alphabet (GOOGL) could swing about ±5.5% by week’s end after results. A move from Tuesday’s close would push shares toward roughly $366 (near May highs) or below $329.

The put/call ratio favor calls for the next four expirations, indicating bullish positioning.

Technical Analysis Perspective:

• GOOGL began an uptrend in March 2026.
• Price hit an all-time high near 404 in mid‑May 2026, then pulled back.
• A rising trendline from the March ’26 low (~271) was near 333 in late June.
• The stock is testing that trendline heading into earnings.
• Base case: if GOOGL holds 348–342 after earnings, expect a move toward the 370–373 resistance.
• Alternate case: a break below would target the 334–330 zone.

Daily Candlestick Chart

GOOGL Seasonality Chart:

Since 2009, GOOGL has finished July higher in 45% of years, with an average gain of 7.37%; August has averaged a 0.41% RISE in 53% of years.

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Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, & Fund Management. He is the founder of www.twtlearning.com providing financial education, research and advisory services to fund & hedge fund managers and family offices.

He has been trading FX, FX options, US stocks & options, Indices, Commodities & Oil, and Metals Futures. He has a CMT charter, an AAPTA membership, and a CMT Canada membership. He has worked in various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters, Refinitiv, MAK Allen & Day Capital Partners, and Bridge Information Systems.

He is regarded as an excellent mentor and has trained more than 2000+ users in North America, Gulf countries & Asia on financial markets & products, active and passive trading, and technical analysis strategies. He emanated technical analysis daily and weekly reports for BridgeNews Chicago bureau and updated technical analysis reports on Bloomberg and Reuters while working with ABN Amro bank treasury & capital markets. Has moderated and produced technical analysis reports for Thomson Reuters (Refinitiv) users’ chat rooms and trained users on technical analysis techniques and models. Conducted TA & Global Markets outlook workshop with central banks, sovereign funds, global & regional banks & family offices.