Alphabet Q2 earnings soar as Anthropic stake explodes in value

Alphabet earnings rise nearly 300% YoY on $98 billion increase in equity portfolio value.
Google Cloud revenue spikes 82% YoY to $24.5 billion.
Search revenue rises 17% YoY, YouTube ads gain 13% YoY.

Clay Webster FXStreet

Alphabet (GOOG, GOOGL) reported $9.11 in earnings per share on Wednesday evening, a whopping $6.11 ahead of the Wall Street consensus. But the share price moved little after an initial period of volatility (with GOOGL spiking to $353 and falling below $332 before leveling off near the regular session's close at $342) as the lion's share of the increase owed itself to a $98 billion increase in the value of Alphabet's equity portfolio, which most analysts believe is largely tied its approximate 14% stake in Anthropic and was already priced in.

Revenue in the second quarter rose 24% YoY to $119.8 billion and beat the Wall Street consensus by over $2.8 billion.

“Our AI investments are redefining what’s possible across every part of our business," said CEO Sundar Pichai. "Q2 was an amazing quarter, [...] driven by demand for AI infrastructure and AI solutions. It’s great to see wide adoption of Gemini Enterprise, with nearly 90% of the Fortune 100 using it."

Google Cloud had an immensely successful quarter as its annual revenue growth rate rose from 63% in Q1 to 82% in Q2 at $24.8 billion.

Google Services revenues increased 15% to $94.5 billion, led by 17% growth in Google Search & other, 15% in Google subscriptions, platforms, and devices, and 13% in YouTube ads.

Google's operating margin rose two percentage points to 34% in Q2.

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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