Alphabet Q2 earnings could set the tone for big tech as AI spending faces scrutiny

Alphabet Inc. (NASDAQ: GOOG, GOOGL) will release its second quarter 2026 financial results on Wednesday, July 22. The company will hold its quarterly conference call to discuss the second quarter 2026 financial results on July 22 at 1:30 pm Pacific Time (4:30 pm Eastern Time).

Any mention of Gemini 3.5 Pro, at least during the investor conference call, could set the direction for the stock. Alphabet shares are down about 9% since the previous quarter’s results, despite the company posting a 63% jump in cloud sales. So far this year, shares are up 11% and have risen 82% over the last year.

The delayed launch of Gemini 3.5 Pro, initially scheduled for June, is affecting investor sentiment and raising concerns about the returns on the company’s significant data-center investments, especially in the competitive AI coding tools and agentic AI markets.

Alphabet is months behind schedule on delivering Gemini 3.5 Pro, its most powerful flagship AI model, because the company has been taking time to improve its capabilities, particularly in coding, according to a Bloomberg report.

Meanwhile, investment in AI infrastructure is continuing. In June, the company announced plans to raise $80 billion in equity capital to strengthen its AI infrastructure and computing capabilities, with Berkshire Hathaway committing $10 billion in a private placement as part of the initiative.

Also Read: IBM stock down 30% since last earnings warning. Will it fall further after Q2 results?

Second Quarter Results

The second quarter results show the company made a good start to 2026. Search, boosted by AI experiences, drove usage; queries hit an all-time high, and revenue grew 19%. The most-watched metric, Google Cloud revenue, grew 63% to $20.0 billion.

“Looking at the company overall, Alphabet is likely headed for roughly 20% revenue growth. A big driver of that is cloud growth, which is running at around 60%, along with roughly $22 billion in other expected revenue,” says David Miller, CIO and senior portfolio manager at Catalyst Funds.

In Q2, Alphabet’s consolidated revenue rose 22%, or 19% in constant currency, to $109.9 billion, reflecting strong performance across the business. Net income rose 81%, and EPS rose 82% to $5.11.

“Alphabet is expected to post another quarter of strong revenue growth, but Wall Street will be focused on cloud performance, advertising resilience, capital expenditures, and whether AI investments are translating into sustainable earnings growth,” says Chris Ballard, Managing Partner, Check Capital.

It remains to be seen how much impact Alphabet’s results will have on overall sentiment around big tech stocks. Apart from Alphabet, investor focus will also turn to the upcoming earnings reports from other major tech firms, including Microsoft, Meta, Apple, Amazon, Nvidia, and Tesla. Today, after market hours, Tesla is also reporting its numbers.

“Alphabet reports against consensus revenue of roughly $117 billion, with its AI capex path the number to watch. Tesla arrives with a second-quarter record of 480,126 deliveries, its first year-on-year delivery growth in two years. Strong numbers tonight would confirm that earnings can keep carrying the market through the shock. For Indian investors with global portfolios, earnings, not headlines, are setting the direction of global equities,” says Subho Moulik, Founder & CEO, Appreciate.

These companies will need to show that their significant investments in artificial intelligence are yielding revenue growth, margin expansion, and stronger cash flow generation to push the Nasdaq higher, or a downtrend could be seen in the tech-heavy index.

“Tonight’s Alphabet and Tesla earnings represent a broader referendum on whether massive AI investments are generating meaningful financial returns. Investors are looking beyond earnings beats and focusing on capital allocation efficiency. The biggest risk is not disappointing quarterly earnings–it is weakening confidence in the broader AI investment narrative that has driven markets for the past two years,” says Mark Malek, CIO, Siebert Financial.

Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Stock market investments are subject to market risks, and past performance is not indicative of future results. The views expressed by the analysts and fund managers quoted are their own and do not necessarily reflect the views of this publication. Readers are advised to consult a certified financial advisor before making any investment decisions. Neither the author nor the publication accepts liability for any losses arising from the use of this information.