Alphabet exceeded Q2 earnings expectations with a strong search business growth of 11% year-over-year and significant gains in Google Cloud revenue. However, a $10 billion increase in capital expenditures, raising the total to $85 billion, caused investor unease. CEO Sundar Pichai emphasized robust company growth and leadership in AI. The rise in expenditures aims to maintain a competitive edge in AI amid competition, notably from Meta's aggressive strategies and hiring initiatives. Following the announcement, Alphabet shares fell by approximately 2.5%.
"We had a standout quarter, with robust growth across the company. We are leading at the frontier of AI and shipping at an incredible pace."
Despite a strong performance, the announcement of a $10 billion increase in capital expenditures brought Alphabet's total to $85 billion, alarming investors.
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