Google Stock Opens Lower on AI Chip Slump but Q2 and Blockchain Boost Sentiment
Strong results, new blockchain developments, and raised forecasts underline Alphabet’s momentum, though capital spending plans have sparked
Quick overview
- Alphabet reported strong Q2 earnings, with revenue of $81.2 billion and adjusted EPS of $2.31, exceeding Wall Street expectations.
- Google Cloud sales reached $13.6 billion, driven by demand for AI infrastructure, while YouTube ad revenue grew 13% year-on-year.
- The company introduced the Google Cloud Universal Ledger, a blockchain initiative aimed at serving financial institutions with crosschain capabilities.
- Despite bullish analyst projections for EPS growth, concerns over increased capital expenditure plans have led to cautious investor sentiment.
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Strong results, new blockchain developments, and raised forecasts underline Alphabet’s momentum, though capital spending plans have sparked some caution.
Alphabet Q2 Earnings: Outperforming Expectations
Alphabet delivered another strong quarter, with all key metrics surpassing Wall Street’s forecasts. Revenue excluding traffic acquisition costs came in at $81.2 billion, while adjusted EPS reached $2.31.
Google Cloud maintained robust momentum, reporting $13.6 billion in sales, highlighting demand for AI-driven infrastructure. YouTube advertising revenue rose 13% year-on-year to $9.8 billion, reaffirming Alphabet’s strength in digital advertising.
Google Chart Weekly – The Strong Rebound Off the 100 SMA Continues
The company’s market capitalization has now swelled to $2.55 trillion, driven by sales growth of 13.1% over the past year. Shares surged to $210.50, marking fresh record highs above the February peak of $207.
Google Blockchain: Universal Ledger Revealed
Adding to earnings excitement, Alphabet unveiled progress on its blockchain initiative. Rich Widmann, Head of Web3 Strategy, announced the Google Cloud Universal Ledger (GCUL) in a LinkedIn post.
The ledger supports Python-based smart contracts and is designed as crosschain infrastructure, comparable to Ethereum or Polkadot. GCUL aims to serve financial institutions as a shared, reliable backbone without tying them to a rival’s core business.
While the launch sparked enthusiasm, investors remain cautious given the early-stage nature of the technology and its competition with entrenched blockchain platforms.
FY2025 Outlook and Market Sentiment
Analyst projections for Alphabet remain bullish. EPS is expected to rise to $2.37 this quarter, a 12% year-on-year increase. For FY 2025 and FY 2026, EPS forecasts have been raised to $10.12 and $10.76, representing a 25.9% and further year-on-year rise, respectively.
Investor optimism is strong, though tempered by Alphabet’s updated capex guidance. The company lifted its 2025 capital expenditure plan from $75 billion to $85 billion, aimed at expanding cloud and AI infrastructure.
The announcement weighed slightly on after-hours trading, as margin and free cash flow concerns resurfaced. While this signals potential short-term pressure, it underscores Alphabet’s determination to secure long-term dominance in AI and cloud services.
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