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Alphabet Inc. (Class C) (GOOG) · Q2 2026 results and valuation
Share price: $290.63 · 2026-11-11
Alphabet Inc. operates a collection of businesses including Google, which provides online search, advertising, YouTube, and cloud computing services. The company develops artificial intelligence technologies and hardware products for global users, partners, and enterprises. Source: 10-K annual report (2026-02-05)
Results Q2 2026 vs Q1 2026 · previous quarter · published 22 Jul 2026 and 29 Apr 2026
Net income up 79.3% on the previous quarter. Management sounded upbeat, in its script and in answers to analysts.
1 · Numbers
+79.3%
Net income vs Q1 2026
Outlook given
Net income 112.19B vs 62.58B
Revenue +9.0%
Against the same quarter last year (Q2 2025) it is +297.9%, so it is not just seasonal.
Why Net income increased significantly primarily due to unrealized gains in OI&E.
2 · How management spoke
Upbeat
More upbeat than 71% of company calls
Answers to analysts: upbeat, in line with the script.
Similar to last call.
3 · What stood out
Alphabet Inc. Cloud revenue grew 82% due to demand for AI infrastructure and solutions, while the Cloud backlog reached $514 billion.
Valuation
Is Alphabet Inc. (Class C) undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 16.1% growth a year (3-year revenue growth), the model's fair value is $240.11 a share — the stock trades 21% above it. Today's price assumes 18.9% growth a year.
Current price
$290.63
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+18.9% for 10 yrs
Fair value / share
$240.11
Buy below
$180.08
Price vs fair value
Overvalued 21%
Price vs buy-below price
Overvalued 61%
Read between the lines
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Figure
Cloud revenue grew 82% due to demand for AI infrastructure and solutions, while the Cloud backlog reached $514 billion.
Source quote
“Cloud revenue grew 82% powered by strong demand for AI infrastructure and AI solutions and Cloud backlog grew to $514 billion.”
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Figure
Consolidated revenues rose to $119.8 million, an increase of 24% or 23% in constant currency compared to the previous quarter.
Source quote
“Consolidated revenues were $119.8 million, up 24% or 23% in constant currency.”
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Figure
Cloud revenues increased 82% to $24.8 billion, driven primarily by GCP, core GCP, AI solutions, and AI infrastructure.
Source quote
“Cloud revenues were up 82% to $24.8 billion driven primarily by GCP, which grew faster than Cloud overall, core GCP, AI solutions and AI infrastructure were all important drivers of growth.”
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Guidance
Google updated its full year 2026 CapEx guidance range to $195 billion to $205 billion.
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Figure
Nearly 90% of Fortune 100 companies are using Gemini Enterprise, showing wide adoption of the product.
Source quote
“It's great to see the wide adoption of Gemini Enterprise with nearly 90% of Fortune 100 using it.”
4 more
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Figure
Model APIs increased from 16 billion tokens to approximately 22 billion tokens per quarter, reflecting an increase in volume processed since the previous quarter.
Source quote
“Our model APIs are now processing approximately 22 billion tokens permanent. That's up from $16 billion just a quarter ago.”
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Figure
The Gemini app reached 950 million monthly active users while daily active users tripled in the last year, indicating significant growth in user engagement.
Source quote
“Next, the Gemini app, which now has 950 million monthly active users with daily active users tripling in the last year.”
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Figure
The product is out of beta and has been adopted by 0.5 million advertisers.
Source quote
“It's out of beta and 0.5 million advertisers have already adopted it.”
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Figure
Adopting AI-powered campaigns like AI Max or PMax results in an average of 15% more conversions or value on search at a similar ROAS.
Source quote
“Those who adopt our AI-powered campaigns like AI Max or PMax see an average of 15% more conversions or value on search at a similar ROAS.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“But overall, if you think about the cloud margins, obviously, a really fantastic expansion of margin to 35.6% this quarter, outstanding strong operational discipline across the business and leveraging growth...”
“Cloud revenue grew 82% powered by strong demand for AI infrastructure and AI solutions and Cloud backlog grew to $514 billion.”
“Google Services revenues increased 15% to $94.5 billion reflecting strong growth in search and subscriptions.”
Full figures
USD · ROIC.AI fundamentals (USD)
| Metric | Q2 2026period end 2026-06-30 | Q1 2026period end 2026-03-31 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 119.80B | 109.90B | +9.0% | 96.43B | +24.2% |
| Gross profit | 73.85B | 68.62B | +7.6% | 57.39B | +28.7% |
| Operating income | 40.77B | 39.70B | +2.7% | 31.27B | +30.4% |
| Net income | 112.19B | 62.58B | +79.3% | 28.20B | +297.9% |
| EPS | 9.11 | 5.11 | +78.3% | 2.31 | +294.4% |
| P/E today 14.8 | 17.7 | 21.9 | −4.2 | 18.9 | −1.2 |
Topics
Most discussed now
- YouTube advertising revenues grew 13%, driven by direct response and brand.
- Alphabet is seeing tons of demand for its workhorse Gemini Flash series because it hits the sweet spot of performance...
- The core engine of Alphabet's search ads relies on a dual prediction, delivering immediate utility for the user while maximizing...
- Total operating expenses were up 27% to $33.1 billion.
- Alphabet is going to continue to see a lot of innovation, in my opinion, and direct response with shoppable ad formats...
Faded since Q1 2026
- Nothing dropped away.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Other events · SEC 8-K
- Results of operations · SEC 8-K
- Other events · SEC 8-K
Alphabet Inc. filed a Form 8-K on August 10, 2026, regarding various debt instruments including senior notes due between 2028 and 2126.
- Results of operations · SEC 8-K
Alphabet Inc. issued a press release and held a conference call on July 22, 2026, regarding its financial results for the quarter ended June 30, 2026.
- Director or officer change; Shareholder vote results · SEC 8-K
The filing reports a director or officer change and shareholder vote results for Alphabet Inc. on June 5, 2026.
- Material agreement; Change to shareholder rights; Articles or bylaws amended · SEC 8-K
Alphabet Inc. filed certificates of designation for 6.25% Series A and Series B Mandatory Convertible Preferred Stock, which became effective on June 4, 2026.
- Director or officer change · SEC 8-K
- Material agreement; Regulation FD disclosure; Other events · SEC 8-K
Alphabet announced equity offerings totaling $80 billion to fund AI infrastructure, following a Q1 2026 revenue of $110 billion, up 22% year-over-year.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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September
payment of quarterly cash dividend
Source quote
“And as mentioned in our press release, our Board of Directors declared a quarterly cash dividend on our common stock of $0.22 per share, which is payable in September.”
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over the next 24 months
recognition of just over 50% of the total backlog as revenue
Source quote
“The majority of the backlog is related to typical GCP contracts for a broad mix of customers, and we expect to recognize just over 50% of the total backlog as revenue over the next 24 months.”
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Q3
begin lapping an acceleration in Search performance
Source quote
“At the same time, in Q3, we will begin lapping an acceleration in Search performance that began in the third quarter last year.”
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this year
recognize a relatively small portion of the revenues from our existing TPU system sales agreements
Source quote
“We continue to expect to recognize a relatively small portion of the revenues from our existing TPU system sales agreements this year, ramping as we exit 2026.”
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2027
realize the vast majority of the revenues from these agreements
Source quote
“We anticipate the vast majority of the revenues from these agreements will be realized in 2027.”