Alphabet beats earnings expectations, raises spending forecast

• Alphabet reported second-quarter results on Wednesday that beat on revenue and earnings expectations, but the company said it would raise its capital investments by $10 billion in 2025.
• The company increased its capital expenditures for 2025 to $85 billion, up $10 billion from an initial projection in February, due to “strong and growing demand for our Cloud products and services.”

Alphabet reported second-quarter results on Wednesday that beat on revenue and earnings expectations, but the company said it would raise its capital investments by $10 billion in 2025.

Shares of the company were down slightly in after hours trading.

Here's how the company did, compared with estimates from analysts polled by LSEG:

• Revenue:$96.43 billion vs. $94 billion estimated
• Earnings per share:$2.31 vs. $2.18 estimated

Wall Street is also watching several other numbers in the report:

• YouTube advertising revenue: $9.8 billion vs. $9.56 billion, according to StreetAccount
• Google Cloud revenue: $13.62 billionvs.$13.11 billion, according to StreetAccount
• Traffic acquisition costs (TAC): $14.71 billion vs. $14.18 billion, according to StreetAccount

The company's overall revenue grew 14% year over year, higher than the 10.9% Wall Street expected.

Alphabet is going to spend more on artificial intelligence in 2025 than it anticipated.

In February, the company said it expected to invest $75 billion in capital expenditures in 2025 as it continues to expand on its AI strategy. That was already above the $58.84 billion that Wall Street expected at the time.

The company increased that figure on Wednesday to $85 billion, saying it was raising it due to “strong and growing demand for our Cloud products and services.”

Alphabet's search and advertising units still showed growth in the second quarter despite AI competition heating up. The company's search unit brought in $54.19 billion during the quarter, and its advertising revenue grew to $71.34 billion — up about 10.4% from $64.61 billion the year prior.

Google's YouTube advertising revenue came in at $9.8 billion, higher than Wall Street expected.

Alphabet's net income increased to $28.20 billion — up 20% from the previous year.

The company said its “Other Bets” segment, which includes its self-driving car unit Waymo and life sciences unit Verily, brought in $373 million — up from $365 million a year ago. Other Bets reported a loss of $1.25 billion — up from the $1.13 billion a year ago.