Key Takeaways
- Alphabet’s Q2 earnings release is scheduled for Wednesday after market close, with analysts projecting earnings per share of $2.95 and total revenue reaching $116.98 billion
- Wall Street forecasts Google Cloud Platform revenue at $22.4 billion, representing a remarkable 64% increase compared to last year’s corresponding quarter
- Over the past three months, Alphabet shares have climbed approximately 4%, surpassing performance from Amazon, Meta, and Microsoft
- Reports indicate Google is developing “Frozen v2,” a proprietary chip aimed at enhancing Gemini model processing capabilities
- The stock holds a Strong Buy rating from analysts, who set an average price target at $267.53
As Wednesday’s earnings announcement approaches, Alphabet finds itself under intense scrutiny from investors eager to see tangible returns from the company’s substantial artificial intelligence investments.
Financial projections for the second quarter point to earnings per share of $2.95 alongside revenue of $116.98 billion. These figures represent significant growth from the year-ago period, which saw EPS of $2.31 and revenue totaling $96.4 billion. When traffic acquisition costs are excluded, revenue is anticipated to reach $101.5 billion.
Google Cloud Platform stands out as a critical metric for this earnings report. Wall Street analysts project GCP will generate $22.4 billion in revenue, marking a substantial 64% jump from the $13.6 billion recorded in Q2 2025. The cloud division has emerged as a primary growth driver for Alphabet as businesses increasingly adopt its artificial intelligence solutions.
Another indicator worth monitoring is remaining performance obligations, which represent contracted work yet to be completed. These are projected to exceed $488.1 billion, representing a staggering 351% increase from the prior year’s Q2 figure and signaling robust future demand.
Share performance for Alphabet over the last quarter shows a gain of approximately 4%. This outpaces competitive performance from similar tech giants: Amazon has remained essentially unchanged, Meta has declined nearly 6%, and Microsoft has dropped 5%.
Proprietary Chip Development Underway
Earlier this week, Alphabet received a sentiment boost following The Information’s report about a new proprietary semiconductor in development. The chip, internally referred to as Frozen v2, would integrate portions of the Gemini model directly into silicon, reducing latency and boosting operational efficiency.
Google has not publicly confirmed technical details, though the disclosure contributed to optimistic momentum before the earnings release.
Meanwhile, questions have surfaced regarding Gemini 3.5 Pro. Bloomberg reported a postponement of the model launch due to performance concerns when benchmarked against competitors. Google countered this narrative, stating the company is “currently testing 3.5 Pro, an upgraded Flash model, and other models with partners.”
Wall Street Perspectives
The analyst community maintains an optimistic stance ahead of Wednesday’s report. JPMorgan analyst Doug Anmuth elevated his price target from $260 to $300 while reaffirming a Buy recommendation. His rationale includes Google’s favorable outcome in the DOJ search agreement litigation, which eliminated a significant uncertainty factor, combined with consistent operational excellence.
KeyBanc analyst Justin Patterson similarly increased his target to $300 from $265, keeping his Buy rating intact. Patterson’s firm identifies positive momentum across Search, Cloud infrastructure, and the Waymo autonomous vehicle division, while noting the stock’s valuation remains reasonable at just a 1.5x premium to S&P 500 forward earnings multiples.
With 28 Buy recommendations and 8 Hold ratings among analysts, GOOGL earns a Strong Buy consensus rating. The mean price target stands at $267.53.
The options market suggests traders are anticipating volatility following the earnings announcement, with the at-the-money straddle on the $270 strike pricing in approximately a 6.6% swing in either direction.
Alphabet maintains an impressive track record of surpassing earnings expectations across its previous 10 consecutive quarters. The upcoming Q2 results will be released after Wednesday’s closing bell.
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