TLDR
- Alphabet secured a $10B, six-year cloud deal with Meta Platforms.
- Q2 2025 earnings beat: $2.31 EPS vs $2.17 estimate, revenue $96.4B.
- Google Cloud revenue surged 32% to $13.6B, operating profit doubled.
- Stock hit record $212.27 intraday, up 10% this month.
- Google to invest $9B in Virginia data centers through 2026.
Alphabet Inc. (NASDAQ: GOOG) stock traded at $212.29, down 0.04% as of 10:09 AM EDT after reporting Q2 2025 results that exceeded expectations.
On August 28, Alphabet announced earnings per share of $2.31, beating the $2.17 forecast. Revenue climbed 14% year-over-year to $96.4 billion, surpassing estimates of $93.9 billion.
Operating income rose 14% to $31.27 billion, with a stable operating margin of 32.4%. Google Cloud continued its strong trajectory, recording $13.6 billion in revenue, up 32%, and doubling operating income to $2.83 billion.
Meta Partnership Adds $10 Billion Boost
A highlight of the quarter was Google securing a six-year, $10 billion cloud partnership with Meta Platforms. The deal allows Meta to leverage Google’s advanced cloud infrastructure, including AI accelerators like Tensor Processing Units and GPUs, to support large-scale AI projects.
This collaboration underscores AI’s growing infrastructure needs while highlighting how digital advertising competitors can collaborate in cloud services. Meta’s broader capital expenditure guidance of up to $118 billion in 2025 demonstrates the scale of demand.
Financial Strength and Investments
Alphabet closed the quarter with approximately $95 billion in cash and marketable securities, maintaining flexibility for aggressive investment. Free cash flow totaled $5.3 billion despite a 70% year-over-year increase in capital expenditures, which reached $22.45 billion.
The company raised its annual capital expenditure forecast to $85 billion, emphasizing AI and cloud buildout. CEO Sundar Pichai described these commitments as central to Alphabet’s long-term leadership strategy in artificial intelligence and enterprise services.
Record Stock Performance and Technical Momentum
GOOGL shares have shown sustained momentum, gaining 6% in five days, 10% over one month, and 24% across six months. Shares touched a record intraday high of $212.27 this week before closing at $211.6.
The stock’s Relative Strength Index (RSI) hit 73, signaling overbought conditions, yet the heavy trading volume suggests strong investor demand. Analysts maintain a consensus “Strong Buy” rating, with a mean price target of $220.43, reflecting 4.7% upside potential.
$9 Billion Virginia Data Center Expansion
Google announced an additional $9 billion investment in Virginia through 2026 to expand AI and cloud infrastructure. The initiative includes a new data center in Chesterfield County and upgrades in Loudoun and Prince William counties.
Virginia, dubbed “Data Center Alley,” has been a focal point for hyperscale investments. Google also committed $1 billion in AI training for Virginia college students, reinforcing local partnerships. These moves align with national strategies to secure U.S. leadership in AI under evolving policy landscapes.
