The author argues Alphabet (NASDAQ:GOOGL) has an edge by owning its TPU chips, power, private fiber networks and multimodal training data, while rivals must rent them. Google Cloud revenue in Q2 2026 rose 82% to $24.77 billion, and operating income climbed 30.38% to $40.77 billion. The article cites a trailing P/E of 14, debt-to-equity of 0.14, and a 5% quarterly dividend increase to $0.22, and compares these with higher P/E ratios at Microsoft and Amazon. Risks noted include Q2 capital expenditures of $44.92 billion, which pushed free cash flow to -$5.86 billion, long-term debt rising to $98.2 billion, and $49.6 billion raised in equity. After the stock fell 7.16% over the week to $324.22, the author says they bought more shares.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
GOOGLcloud computingartificial intelligenceearnings
Open a keyword to see other news on the same topic.
Related tickers and likely impact
GOOGL
▲ Likely positiveAlphabet Inc. (Class A)
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $4.3T |
| Close on 10/22/2026 | 324.21 |
| Change that session | -3.15% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- Google CEO Admits Cloud Business Is Sacrificing Revenue to Win AI Race
Alphabet CEO Sundar Pichai says Google is giving up potential Cloud revenue to prioritize AI research, even as customers struggle to secure computing capacity. Google Cloud revenue rose 82% to $24.8 billion in the second quarter.
- If Alphabet Does This on Oct. 28, the Stock Could Skyrocket
Alphabet reports third-quarter results on October 28, and the author argues Google Cloud revenue growth could be the catalyst that sends its stock sharply higher. The stock is up only about 7% this year after topping 25% in early May, and it is trailing the S&P 500. Google Cloud revenue grew 82% in the second quarter, accelerating from 63% in the first quarter and 48% in the fourth quarter of 2025, well ahead of Microsoft Azure's 43% and AWS's 37%. Growth is fueled by AI demand and Alphabet's sales of its TPU chips to some clients, with most of that revenue expected in 2027, while Alphabet plans capital expenditures of $195 billion to $205 billion this year. The author considers the stock fairly valued at 27 times operating income, in line with peers, and says triple-digit cloud growth could drive the share price much higher.
- Alphabet Stock Slipped After Q2 Earnings. Here's What Investors Need to See in Q3.
Alphabet shares fell about 6% after its second-quarter report, despite revenue rising 24% to $119.8 billion and Google Cloud revenue jumping 82% to $24.8 billion. Investors are growing impatient with heavy AI spending and want evidence of returns, especially after Alphabet raised its full-year capex forecast by $15 billion to a range of $195 billion to $205 billion. Quarterly capex reached $44.9 billion, pushing free cash flow to negative $5.9 billion. The author says the third-quarter report on October 28 is an opportunity to prove the investments pay off, with two areas to watch: Google Cloud's growth and the custom TPU chip business, which began recognising direct chip sales revenue in the second quarter but does not report it separately.
- Alphabet Looks Better By The Day for This One AI Strategy
The author argues Alphabet stands apart because it owns the full AI stack, from Gemini models and TPU chips to Google Cloud, Search and YouTube. Google Cloud revenue reached $24.77B, up 82% year over year, with backlog above $460 billion, while Search and related revenue rose 17% to $63.27B. Operating income climbed 30.4% to $40.77B, and the Gemini app reached 950 million monthly active users. The piece also flags risks: 2026 capex guidance of $175B-$185B, Q2 free cash flow of -$5.86B, borrowings up from $46.5B to $98.2B, suspended buybacks and a $49.6B equity raise that dilutes shareholders. The author still holds the stock, believing Alphabet owns more of the AI stack than other companies they follow.
- One Reason Alphabet Stock Looks Better Than Its Price
Alphabet (GOOGL) shares fell 1.2% over the six months to October 21, 2026, while the S&P 500 gained 9.3%, even as Google Cloud grew quickly: second-quarter fiscal 2026 revenue reached $24.8 billion, up 82%, and operating margin rose to 35.6% from 20.7%. Cloud's backlog reached $514 billion at the end of June 2026. However, Alphabet spent $44.9 billion on capital projects in the quarter, more than the $39.1 billion of operating cash flow, and raised its 2026 capex guidance to $195–205 billion from $180–190 billion. The main risks cited are limited capacity and costs rising faster than backlog converts to revenue, with most revenue from TPU system deals expected in 2027. Alphabet's third-quarter report is expected on October 28, 2026.
- Will Alphabet Stock Soar After Oct. 28? History Offers an Answer That’s Strikingly Clear.
Alphabet is scheduled to report third-quarter earnings after the market closes on Oct. 28, and the article notes the stock advanced in the two weeks following three of its last four quarterly reports. Google advertising made up 68% of the company's $119 billion second-quarter revenue, while Google Cloud revenue rose 82% to more than $24 billion on enterprise AI demand. Capital expenditures were about $44 billion in the quarter, with 60% going to servers and 40% to data centers and networking. Investors have worried about rising capex, and Alphabet, Amazon, Microsoft and Meta plan to spend more than $700 billion this year on AI. The stock has climbed about 7% so far this year.
Related markets
Latest news
- Interpol Recovers $105M in African Cybercrime Sweep That Shut Illegal Crypto Mines
Interpol said police from 21 countries arrested 1,462 suspects and recovered more than $105 million in Operation Serengeti III, a cybercrime crackdown in Africa that ran from June 29 to August 31, 2026, targeting ransomware, online scams and business email compromise. The operation disrupted 10,909 malicious networks and identified 65,929 victims, with linked losses of more than $385 million. In Angola, investigators shut two illegal crypto mining centers, arresting nine people and seizing more than 2,000 mining devices and six illegal power transformation stations. In Nigeria, more than $2.4 million in suspected investment fraud proceeds was traced, much of it laundered through crypto transactions. Several investigations remain active.
- Moderna Sinks 4% After 18% Plunge as Melanoma Vaccine Selloff Extends; Merck and Pfizer Slip
Moderna shares fell 4% to $193.62 in morning trading, extending an 18% plunge from the prior session, even though full late-stage data for its personalized melanoma vaccine, given with Merck's Keytruda, came back positive. Compared with Keytruda alone, the combination cut the risk of melanoma recurrence or death, a result near analyst expectations but short of the highest hopes built during a rally that began in August. The vaccine carries far more weight for Moderna, whose approved products are all respiratory vaccines, while for Merck it is an add-on to Keytruda; Merck fell 0.8% to $146 and Pfizer 0.7% to $30.22. The iShares Biotechnology ETF was unchanged at $209.54, suggesting the slide is company-specific. The full data will be presented at a medical conference this weekend.
- OpenAI aiming for new $30 billion funding round at a $1.25 trillion valuation
OpenAI is looking to raise a new $30 billion funding round at a $1.25 trillion valuation, according to Bloomberg, after previously seeking capital at a $1.5 trillion valuation. The company raised $122 billion in March, when it was valued at $852 billion. Rival Anthropic is preparing to file its IPO ahead of the Thanksgiving holiday, with Wall Street anticipating a valuation of as high as $2 trillion, and could publicly reveal its S-1 at any time in the coming days. The talks come amid broad declines in AI stocks over concerns about data center buildouts, with neoclouds such as CoreWeave (CRWV) at the center over their heavy debt loads. The Philadelphia Semiconductor Index is down 7% over the past 5 days, and Meta fell as much as 7% on Thursday after raising the low end of its capital expenditure guidance.
- Bloom Energy Sinks 4% as Negative Cash Flow Overshadows Third Guidance Raise; FuelCell and Plug Power Hold Steady
Bloom Energy reported record Q3 2026 sales of $1.24 billion, above the $1.07 billion consensus, and raised its full-year outlook for the third time this year. However, operating cash flow swung to negative $27.1 million as inventory, contract assets and receivables climbed, and $153.5 million in capacity spending at Fremont and Newark pushed free cash flow to a use of $181 million. Shares fell 4% to $208.74 in morning trading, though still up 140% year to date, while FuelCell Energy and Plug Power were little changed. Management said the cash use is "not the beginning of a trend", ended the period with $2.5 billion in cash, and forecasts full-year revenue of $4.4 billion to $4.6 billion. Bloom's Q4 2026 report will show whether collections catch up with deliveries.
- Apple releases $2,000 iPhone Duo – but customers struggle to actually buy one
Apple began selling the $2,000 folding iPhone Duo, but stock sold out immediately and customers were told to wait until next year for delivery, with pre-orders capped at two handsets per customer. Many people queued overnight at Apple stores from Sydney and Shanghai to London and New York, although sales were rationed. One Sydney buyer paid A$3,899 ($2,734) for a 512GB model, while a Hong Kong buyer bought one to resell for a profit of around HK$4,000. Reviewers praised the hinge design but said the Duo lacks a telephoto lens, that third-party apps still need to be reworked for the new display, and that it is less handy for everyday tasks. The launch is also an early challenge for new CEO John Ternus, who took charge in September.
- Great News for Boeing Investors
The U.S. Federal Aviation Administration (FAA) has certified Boeing's 737 MAX 10, a step the article says reduces risk and should improve earnings, cash flow and competitiveness against Airbus' A321neo. Management had repeatedly said it expected certification in 2027, but a history of groundings, delays and FAA production caps had left investors apprehensive. Once the already-built MAX 10s are delivered, Boeing will book revenue and cash that is currently tied up in undelivered aircraft; about 30% of its 737 backlog is MAX 10s, and larger aircraft typically carry higher margins. The MAX 10 has a range of 3,100 nautical miles and a maximum capacity of 230 passengers, below the A321neo's 3,400 to 4,700 nautical miles and 244 passengers, but it lets airlines add short-haul capacity without switching to Airbus planes.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.