NEW YORK, July 20, 2026, 08:41 (EDT)
- Alphabet was indicated up 0.4% at 8:13 a.m. EDT, before regular U.S. trading opened.
- The stock dropped 2.9% over the past week, comparing Friday’s closing prices.
- Alphabet will announce results on Wednesday. Early projections show Cloud accounting for 43% of quarterly revenue growth.
Initial calculations indicate Google Cloud contributed approximately 43% to Alphabet’s revenue growth in the second quarter, while Search accounted for an estimated 44%.
Cloud accounts for just 19% of projected revenue. However, it could contribute $8.85 billion, coming close to Search’s $9.10 billion gain.
Search remains close to three times bigger, making Cloud’s growth especially significant for how the stock may react on Wednesday.
Initial Visible Alpha forecasts, matched against figures from the same period last year, indicate the breakdown:
| Metric | Q2 2025 actual | Q2 2026 preliminary | Year-on-year change | Share of revenue increase |
|---|---|---|---|---|
| Total revenue | $96.43bn | $117.12bn | up 21% | 100% |
| Google Search & other | $54.19bn | $63.29bn | up 17% | 44% |
| Google Cloud | $13.62bn | $22.47bn | up 65% | 43% |
| Diluted EPS | $2.31 | $2.90 | up 26% | n/a |
Alphabet ended Friday at $346.77, a decrease of 2.9% compared to the previous Friday. Ahead of Monday’s open, shares pointed to around $348.
U.S. markets had yet to open at the dateline. At 7:10 a.m. EDT, Nasdaq 100 futures rose 0.8%. This increase came after a retreat led by chip stocks last week.
Alphabet is set to announce its results ahead of its 4:30 p.m. EDT call on Wednesday. Investors are expected to assess Cloud’s updated revenue figures against the spending required to expand infrastructure.
Cloud revenue climbed 63% to $20.0 billion, with operating income reaching $6.6 billion, a threefold increase. The first-quarter comparison base is elevated.
Chief Executive Sundar Pichai said in April, “Our enterprise AI solutions have become our primary growth driver for cloud for the first time.” Reuters
The cash outlay also increased. Based on company figures, capital expenditure in the first quarter accounted for 78% of operating cash flow, up from 48% in the same period last year.
Alphabet projects capital expenditures between $180 billion and $190 billion in 2026. Executives have indicated another substantial rise is expected the following year.
This increases the challenge. Market strategist Kathleen Brooks noted investors could “get more impatient” should earnings indicate AI is still largely in the investment period. Reuters
Market conditions remain challenging. The Philadelphia semiconductor index closed Friday over 20% under its June peak. Brent crude surpassed $90, and the yield on the 10-year Treasury hit 4.55%.
Risks include a potential shortfall in Cloud, increased spending projections, or weaker Search revenue, all of which could prompt analysts to lower estimates. A rise in oil prices and bond yields might also exacerbate any valuation adjustment.
If Cloud matches Search’s growth in dollar terms without further cost increases, that would count as a clearer win. Simply beating EPS projections may not end the discussion.
