On 22 July, Alphabet released its Q2 2026 earnings, reporting a 24% year-on-year increase in revenue to $119.8 billion. Google Cloud was a standout performer, with revenue surging 82% to $24.77 billion and comfortably surpassing analysts' expectations. Search advertising contributed $63.3 billion, up 17%, while YouTube revenue rose 13% to $11.06 billion.

Net income nearly quadrupled to $112.11 billion. However, according to the company's financial statements, almost all of that increase was attributable to unrealised revaluation gains on Alphabet's private investments in Anthropic and SpaceX, rather than to improvements in underlying operating performance. Under fair value accounting rules, companies are required to periodically adjust the carrying value of certain equity holdings to reflect estimated current valuations, meaning quarterly mark-ups flow through the income statement even though no cash is realised. For Alphabet, the soaring valuations of privately held AI developer Anthropic — in which Alphabet has invested alongside other backers — and SpaceX created a substantial paper gain that inflated headline profit. Investors and analysts typically discount such non-operational items when assessing earnings quality, which helps explain why the market reaction to the headline net income figure was measured rather than exuberant.

Google Cloud's 82% revenue growth is notable within the broader hyperscaler competitive landscape, where Microsoft Azure, Amazon Web Services, and Google Cloud have been locked in an intensifying race to capture enterprise AI workloads. The segment's accelerating growth rate suggests that Alphabet's investments in AI-optimised cloud infrastructure and model services are translating into meaningful commercial traction, even as competition for enterprise AI spending intensifies.

Quarterly capital expenditure doubled year-on-year to $44.9 billion, underscoring the company's continued heavy investment in AI data centre infrastructure. This level of spending is consistent with the wider industry pattern, as major technology companies collectively commit hundreds of billions of dollars annually to expand compute capacity for training and running large language models. The sustained ramp in capex signals that the infrastructure buildout supporting the AI boom remains in an early, capital-intensive phase, with returns expected to materialise over multiple years rather than individual quarters.

Technical Analysis

On the 4-hour chart of Alphabet (GOOGL Class A on FXOpen), a short-term bearish structure emerged after the price reached the $404 area on 18 May. The subsequent decline lost momentum near $334. Following the reversal, the price attempted to break above the trendline on 6 July but failed to move beyond the prevailing market profile range.

After another rejection from the upper boundary of the profile near $372, the stock turned lower and is currently trading between the Point of Control (POC) at $355 and the lower edge of the profile around $337. A red resistance zone near $391 could cap any recovery attempt, while sustained selling pressure may draw attention to the green support area around $329.

The RSI + Moving Averages indicator currently shows readings of 39, 48, and 47. Although the RSI remains below the moving averages, the averages themselves are still coloured green and sit in the middle of the neutral zone, suggesting that momentum remains inconclusive. Vertical volume has been relatively moderate since the price broke below the trendline, reinforcing the current absence of directional conviction.

Key Takeaways

Despite a sharp increase in reported net income, Alphabet's share price reaction has been relatively muted. Strong contributions from Google Cloud and Search were partly offset by the reality that the majority of profit growth stemmed from a one-off investment revaluation rather than core operations. As a result, fundamental developments — including the durability of Google Cloud's growth trajectory, the trajectory of capex deployment, and the sustainability of search advertising amid AI-driven search disruption — may continue to exert a greater influence on the stock than the current technical setup in the near term.