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Some things stay true: An air-conditioned movie theater will always be an appealing location on a sweltering summer day; a mug of hot chocolate will always sound comforting on a snowy night; and Alphabet, Google’s parent company, will typically post solid earnings.
Shocker: That’s what happened with the tech giant’s Q2 results—even if its AI bets slightly complicated the picture.
Alphabet reported $84.7 billion in sales for the quarter, a 14% YoY jump and beating the $84.1 billion analysts expected, per FactSet data. Net income, meanwhile, jumped to $23.6 billion, which also topped analyst expectations.
Advertising revenue came in at $64.6 billion, up from $58.1 billion the year before. But TikTok, it’s not: YouTube ad revenue fell short of analyst predictions—though just barely, totaling $8.7 billion instead of the expected $8.9 billion.
But even if Alphabet’s continued success feels predictable at this point, this particular earnings report also stressed the value of novelty. The tech company’s “Other Bets” unit, essentially its more out-there, innovative investments, raked in $365 million, up 28% from $285 million last year. And during the company’s earnings call, CFO Ruth Porat said Alphabet will investanother $5 billion in its self-driving car unit, Waymo.
Still, investors want more proof on certain bets, notably artificial intelligence. Alphabet is spending heavily to secure its future: Capital spending climbed to $13.2 billion in Q2 to support Google’s AI efforts.
And CEO Sundar Pichai is here to inform you in his best Howard Ratner voice that his bet is about to pay off: In the company’s earnings call, he noted that the company’s AI efforts were “driving new growth.”
“Year-to-date, our AI infrastructure and generative AI solutions for cloud customers have already generated billions in revenues and are being used by more than two million developers,” he said, adding that Alphabet saw “great progress” in its AI Overviews, the AI summaries you probably noticed the last time you Googled something.