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LOS ANGELES, July 20, 2026 (GLOBE NEWSWIRE) -- Glancy Prongay Wolke & Rotter LLP, a leading national shareholder rights law firm, continues its investigation on behalf of Alphabet Inc. (“Alphabet” or the “Company”) (NASDAQ: GOOG) investors concerning the Company’s possible violations of the federal securities laws.

IF YOU ARE AN INVESTOR WHO LOST MONEY ON ALPHABET INC. (GOOG), CLICK HERE TO INQUIRE ABOUT POTENTIALLY PURSUING CLAIMS TO RECOVER YOUR LOSS.

What Happened?
On July 16, 2026, Bloomberg news reported that Alphabet’s Google is “months behind schedule on delivering Gemini 3.5 Pro, its most powerful flagship AI model” due to the Company’s ongoing coding efforts. Specifically, “[l]ate last month, Google updated the data being used to train Gemini in an attempt to improve [its] skills, but the results were disappointing.”

On this news, Alphabet’s stock price fell $16.40, or 4.4%, to close at $353.81 per share on July 16, 2026, thereby injuring investors.

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If you wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact us.
Charles Linehan, Esq.,
Glancy Prongay Wolke & Rotter LLP,
1925 Century Park East, Suite 2100,
Los Angeles California 90067
Email:  [email protected]
Telephone: 310-201-9150 (Toll-Free: 888-773-9224)
Visit our website at www.glancylaw.com.
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Whistleblower Notice
Persons with non-public information regarding Alphabet should consider their options to aid the investigation or take advantage of the SEC Whistleblower Program. Under the program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Charles H. Linehan at 310-201-9150 or 888-773-9224 or email [email protected].

About Glancy Prongay Wolke & Rotter LLP
GPWR is a premier law firm with decades of experience representing investors and consumers in securities litigation and other complex class action litigation. Recognizing the firm’s recent successes, GPWR was named one of Law360’s Securities Groups of the Year and ranked second-highest in total investor recoveries by Institutional Shareholder Services Securities Class Action Services in 2025. GPWR’s lawyers have handled cases covering a wide spectrum of corporate misconduct and relating to nearly all industries and sectors. GPWR’s past successes have been widely covered by leading news and industry publications such as The Wall Street Journal, The Financial Times, Bloomberg Businessweek, Reuters, the Associated Press, Barron’s, Investor’s Business Daily, Forbes, and Money. Prior results do not guarantee a similar outcome.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Contact Us:
Glancy Prongay Wolke & Rotter LLP,
1925 Century Park East, Suite 2100,
Los Angeles, CA 90067
Charles Linehan
Email:  [email protected]
Telephone: 310-201-9150
Toll-Free: 888-773-9224
Visit our website at: www.glancylaw.com.

Alphabet, Google’s parent company, is designing a new server chip to help its in-house Gemini models operate more efficiently.

The new chip, internally dubbed “Frozen v2,” is slated to be released sometime in 2028, The Information reported, citing anonymous sources. According to the report, the chip could be between six and 10 times more efficient than Google’s existing AI chips, measured by the number of tokens generated per unit of power.

In a response to TechCrunch, the company didn’t directly confirm the report. It didn’t deny it either.

“Our teams are constantly researching and experimenting with new innovations to deliver maximum performance and efficiency for our users and customers,” Google told TechCrunch. “While not every project moves into production, this rigorous exploration is central to our full stack approach. By co-designing our hardware and software from the ground up, we ensure our systems are integrated and highly optimized for real-world workloads.”

AI companies have increasingly sought to produce their own chips as a way to make their in-house models run more efficiently and to address global shortages in AI computing capacity. Such efficiency has become a key selling point for tech companies as concerns about AI spend have dampened the market euphoria that previously characterized the industry. At the same time, firms are engaged in an ongoing attempt to wean themselves off chipmaker Nvidia, which has historically dominated the AI chip market and whose dominance has left major AI makers dependent on its hardware.

In June, OpenAI announced its first custom chip, an inference processor dubbed Jalapeño. Earlier this month, it was reported that Anthropic was discussing a new chipmaking partnership with Samsung.

Investors have previously worried about Alphabet’s massive planned expenditures designed to help it build out its AI strategy. Earlier this year, Google said that it plans to spend between $180 billion and $190 billion. With so much money at stake, the company needs to prove that those investments will pay off.

News of the more efficient Frozen v2 chip appears to have assuaged investors, giving Google a boost ahead of its earnings report later this week. Following publication of The Information’s report, the company’s stock climbed some 3% on Monday morning.

When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

Lucas is a senior writer at TechCrunch, where he covers artificial intelligence, consumer tech, and startups. He previously covered AI and cybersecurity at Gizmodo. You can contact Lucas by emailing [email protected].

BENSALEM, Pa., July 20, 2026 (GLOBE NEWSWIRE) -- Law Offices of Howard G. Smith continues its investigation on behalf of Alphabet Inc. (“Alphabet” or the “Company”) (NASDAQ: GOOG) investors concerning the Company’s possible violations of federal securities laws.

IF YOU ARE AN INVESTOR WHO SUFFERED A LOSS IN ALPHABET INC. (GOOG), CONTACT THE LAW OFFICES OF HOWARD G. SMITH ABOUT POTENTIALLY PURSUING CLAIMS TO RECOVER YOUR LOSS.

Contact the Law Offices of Howard G. Smith to discuss your legal rights by email at [email protected], by telephone at (215) 638-4847 or visit our website at www.howardsmithlaw.com.

What Happened?
On July 16, 2026, Bloomberg news reported that Alphabet’s Google is “months behind schedule on delivering Gemini 3.5 Pro, its most powerful flagship AI model” due to the Company’s ongoing coding efforts. Specifically, “[l]ate last month, Google updated the data being used to train Gemini in an attempt to improve [its] skills, but the results were disappointing.”

On this news, Alphabet’s stock price fell $16.40, or 4.4%, to close at $353.81 per share on July 16, 2026, thereby injuring investors.

Contact Us To Participate or Learn More:
If you purchased Alphabet securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact us:
Law Offices of Howard G. Smith,
3070 Bristol Pike, Suite 112,
Bensalem, Pennsylvania 19020,
Telephone: (215) 638-4847
Email: [email protected],
Visit our website at: www.howardsmithlaw.com.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Contact Us:
Law Offices of Howard G. Smith
Howard G. Smith, Esquire
215-638-4847
[email protected]
www.howardsmithlaw.com

Alphabet GOOGL shares climbed about 3% on Monday after a report said Google is developing a new AI server chip designed specifically to run its Gemini models more efficiently.

According to The Information, the chip, internally codenamed "Frozen v2," would permanently embed parts of Gemini's architecture into the silicon.

The design is intended to reduce the amount of computation and data movement required to process AI queries, potentially improving efficiency while lowering power consumption.

Alphabet responded to the report by emphasizing its ongoing investment in AI hardware innovation.

Its teams are “constantly researching and experimenting with new innovations to deliver maximum performance and efficiency for our users and customers” and “while not every project moves into production, this rigorous exploration is central to our full stack approach.”

“By co-designing our hardware and software from the ground up, we ensure our systems are integrated and highly optimized for real-world workloads,” continued the statement.

The stock was trading 1.3% higher at the time of writing.

Unlike Google's Tensor Processing Units (TPUs), which are designed to support a broad range of artificial intelligence models, Frozen v2 is reportedly being built exclusively for Gemini.

According to The Information, Google engineers believe the chip could deliver between six and ten times more tokens per unit of power than the company's latest TPUs.

Rather than replacing Google's general-purpose AI processors, Frozen v2 is expected to become a specialized addition to the company's custom-chip portfolio.

The report said Google is targeting deployment around 2028, with the project intended to help address internal compute shortages that have reportedly limited the company's cloud capacity.

Last month, Google reportedly agreed to pay SpaceX nearly $1 billion per month to help meet enterprise computing commitments.

The trade-off, according to the report, is flexibility.

Frozen v2 would remain effective only if future Gemini models continue using the same underlying architecture.

Google reportedly views the project as partly a trial run and does not expect to manufacture the chips at the same scale as its TPUs.

Google's hardware ambitions come as its AI business faces growing competitive pressure.

Recently, a Bloomberg report said the next Gemini Pro release has been delayed.

Google has also lost several senior researchers to competitors.

Chinese AI developers have also gained traction, with their models now accounting for 45% of token usage among US companies.

Recent releases from Moonshot AI and Alibaba have further narrowed the performance gap with leading US AI models.

Meanwhile, Google DeepMind Chief Executive Demis Hassabis is on Capitol Hill this week advocating for a federally overseen, industry-funded AI watchdog modeled after FINRA to evaluate advanced AI systems for national security risks before deployment.

Wall Street remains constructive on AlphabetGoogle continues expanding its in-house AI hardware efforts as it seeks to reduce dependence on Nvidia while lowering the cost of running Gemini.

Earlier this year, the company introduced its eighth-generation TPU and has increasingly marketed its chips to external cloud customers, including a multibillion-dollar agreement to supply TPUs to Meta Platforms.

Google has also approached other cloud providers that have traditionally relied on Nvidia GPUs.

Separately, BMO Capital raised its price target on Alphabet to $455 from $435 while maintaining an Outperform rating.

The firm increased its Google Cloud estimates for the fourth quarter and fiscal 2027, citing stronger cloud demand, expanding capacity and a substantial backlog.

However, BMO also noted that questions remain regarding Gemini model performance following reports that Gemini Pro 3.5 has been delayed as it falls short on certain benchmarks.

Alphabet (GOOGL - Free Report) ) will officially kick off the Q2 earnings season for the Magnificent Seven when it reports its quarterly results after Wednesday's closing bell on July 22. 

As the first mega-cap technology company to report, Alphabet could set the tone not only for the tech sector, but also for the broader market heading into reports from Microsoft (MSFT - Free Report) ), Meta Platforms (META - Free Report) ), Amazon (AMZN - Free Report) ), Apple (AAPL - Free Report) ), and Nvidia (NVDA - Free Report) ) over the coming weeks.

With AI remaining Wall Street's dominant investment theme, investors will be looking beyond another likely quarter of double-digit revenue growth to determine whether Alphabet's massive infrastructure investments will generate attractive returns.

Image Source: Zacks Investment Research

Alphabet’s Q2 Expectations Remain HighWall Street expects Alphabet to post another impressive quarter, with consensus estimates calling for earnings of approximately $2.90 per share on revenue of $101.22 billion when including Traffic Acquisition Costs (TAC), which are the payments Google makes to partners for directing traffic to its search and advertising services.

The top-and bottom-line figures would represent roughly 24% year-over-year growth, respectively.

Several key business segments and underlying metrics will likely determine whether Alphabet can exceed expectations:

Google Search advertisingYouTube advertising revenueGoogle Cloud growthOperating marginsAI-related capital expenditures (CapEx)Cloud continues to be one of Alphabet's fastest-growing businesses, with demand for AI infrastructure and enterprise cloud services expected to remain robust. Based on Zacks estimates, Google Cloud revenue is expected to soar 67% to $22.79 billion from $13.62 billion a year ago.

Meanwhile, investors will be watching to see whether Gemini AI strengthens Search and improves monetization across Alphabet's product ecosystem. 

The Zacks ESPThe most intriguing reason for optimism is that the Zacks ESP (Expected Surprise Prediction) indicates Alphabet could once again surpass earnings expectations.

To that point, the Most Accurate and recent estimate among Wall Street analysts has Q2 EPS slated at $2.93 and nearly 2% above the underlying Zacks Consensus of $2.87 as shown below (Current Qtr).

Image Source: Zacks Investment Research

Alphabet has exceeded earnings expectations for 13 consecutive quarters with a very impressive average EPS surprise of 34.43% in its last four quarterly reports.

Image Source: Zacks Investment Research

Frozen v2 MomentumProviding a near-term catalyst, Alphabet shares are moving higher in Monday's trading session after reports that Google is developing a next-generation AI server chip, informally dubbed "Frozen v2," that would run its Gemini models more efficiently by embedding portions of the model's architecture directly into the silicon.

Key Features of Frozen v2

Model hardwiring: Unlike general-purpose AI chips that load models into memory, Frozen v2 would “freeze” certain aspects of Gemini’s neural-network design into the hardware, reducing the need for repeated data movement and calculations.Efficiency gains: Reports suggest Frozen v2 could serve 6-10 times more AI tokens per unit of power than Google’s latest custom Tensor Processing Units (TPUs).Specialized design: Frozen v2 will be a new line of homegrown chips, separate from TPUs, not intended to replace them.Deployment target: As early as 2028, although design details and how much model data will be hardwired are still being finalized. Why It Matters

Addressing AI capacity crunch: Alphabet is facing severe internal compute shortages, which have reportedly led to Google Cloud turning away some external customers.Cost and speed: By reducing overhead, Frozen v2 could lower energy costs and latency, making real-time AI services like voice assistants more feasible. Strategic self-reliance: This move deepens Google’s control over AI infrastructure, reducing reliance on competitors like Nvidia.Basically, Frozen v2 is a bold step toward model-specific AI hardware, aiming to make Gemini-based AI services faster, cheaper, and more scalable — but it comes with trade-offs in flexibility and model compatibility.

AI Spending Remains the Biggest QuestionPerhaps the most important aspect of Alphabet's report won't be the quarterly numbers themselves but management's outlook for AI spending.

Alphabet has dramatically increased its CapEx over the past year as it races alongside Microsoft, Amazon, and Meta to expand AI infrastructure. Investors generally remain comfortable with elevated spending as long as revenue and earnings continue growing at a healthy pace, but any indication that returns on those investments are slowing could pressure the stock.

Conversely, stronger-than-expected Cloud growth or encouraging commentary surrounding Gemini adoption could reinforce the bullish AI narrative that has driven tech stocks throughout 2026.

During Q1, Alphabet’s CapEx spiked 107% YoY to $35.7 billion, with the majority directed toward AI technical infrastructure.

Alphabet's current guidance is for approximately $175 billion-$185 billion in CapEx during FY26. The spending is primarily earmarked for expanding data centers, AI infrastructure, servers, networking equipment, and custom TPUs to support growing demand for Google Cloud and Gemini AI.

Aforementioned, investors will be looking for any updates to that outlook, as well as commentary on whether those investments are generating stronger Google Cloud growth and improving AI monetization.

Image Source: Zacks Investment Research

Alphabet’s Valuation Still Looks ReasonableDespite Alphabet's strong rally over the last year, its valuation remains relatively attractive compared to many other mega-cap tech stocks.

Alphabet stock currently trades at 24X forward earnings, which is near the benchmark S&P 500’s average while offering one of the strongest combinations of earnings growth, free cash flow generation, and balance-sheet strength among the Mag 7.

That reasonable valuation gives Alphabet less room for multiple contraction should earnings merely meet expectations or slightly miss them, while stronger guidance could justify additional upside if analysts continue raising profit estimates.

Image Source: Zacks Investment Research

Bottom LineBecause Alphabet reports before every other Mag 7 company this earnings season outside of Tesla ((TSLA - Free Report) ), its conference call may prove just as influential as its financial results.

Strong Q2 results and positive commentary would likely strengthen confidence ahead of reports from Microsoft, Meta, Amazon, and Nvidia, while disappointing guidance could weigh on sentiment across the entire technology sector.

Expectations are running high for Alphabet's Q2 results, but so is the company's earnings momentum. Optimistically, Alphabet stock currently sports a Zacks Rank #1 (Strong Buy) thanks to favorable earnings estimate revisions and a positive Earnings ESP, suggesting the company may be well positioned to deliver another quarterly beat.

© JHVEPhoto / iStock Editorial via Getty Images

Investors are watching Alphabet (NASDAQ:GOOG | GOOG Price Prediction) ahead of its Q2 2026 results due Wednesday, July 22, after the bell. With shares near $355 and Anthropic’s valuation exploding, this report could scramble how investors read the numbers.

An Anthropic Windfall Waiting to Land Last quarter set a high bar. Alphabet posted an EPS beat of 94.1%, with $5.11 versus $2.63 expected, while revenue climbed 21.79% YoY to $109.9 billion. Google Cloud grew 63% to $20 billion, and backlog nearly doubled to $462 billion.

Since then, the story has taken an even bigger turn. Alphabet holds roughly 14% of Anthropic, a stake worth approximately $135 billion at Anthropic’s latest $965 billion valuation. At the end of Q1, Anthropic was marked at $380 billion. Bank of America estimates the markup will drive roughly $80 billion in unrealized gains this quarter, prompting the firm to forecast EPS of $8.38, well above the Street.

Consensus Estimates Metric Consensus Growth (YoY) Q2 2026 Revenue ~21% Q2 2026 EPS ~32% Q2 2025 Revenue (baseline) $96.43B Q2 2025 EPS (baseline) $2.31 BofA Q2 2026 EPS (Anthropic-boosted) $8.38 Look Past the Anthropic Mark to the Real Business I’ll be reading right past the headline EPS. A markup this large is a one-off accounting event, and investors still need to treat it that way, since it otherwise won’t give a clear picture of how the underlying business is performing. The real signal sits in Google Cloud, where Anthropic is a major TPU customer.

You should watch three things. First, cloud growth. Last quarter’s 63% YoY print came with CFO Anat Ashkenazi admitting “our cloud revenue would have been higher if we were able to meet the demand”. Any acceleration off the $20 billion base tells you TPU capacity is catching up.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Google didn't make the cut. Grab the names FREE today.

Second, backlog. The $462 billion cloud backlog nearly doubled QoQ, and management expects just over 50% to convert to revenue within 24 months. Another leap would confirm the AI infrastructure thesis.

Third, capex discipline. Alphabet already raised 2026 capex to $180 to $190 billion and flagged 2027 will “significantly increase”. Free cash flow fell 46.63% YoY in Q1. Another downdraft could pressure the stock even with a blowout headline.

Search matters too. AI Overviews drove 19% Search growth last quarter, and any deceleration would revive competitive fears.

A Print That Needs a Translator This quarter will hand Alphabet a spectacular headline number thanks to Anthropic, and a possible October Anthropic IPO could push the valuation higher still. But the market has already seen this movie. Prediction markets assign a 97.4% probability of a beat. What will actually move the stock is whether cloud growth reaccelerates and capex stays productive. That is the report inside the report.

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Google didn't make the cut. Grab the names FREE today.

Contact [email protected] for any questions or corrections.

Key Takeaways Alphabet's Q2 growth is expected to be led by Search advertising and Google Cloud momentum.AI Overviews, AI Mode and Gemini are boosting search activity, ad relevance and paid-click growth.Cloud demand, a $460B-plus backlog and roughly 350M paid subscriptions support revenue visibility. Alphabet’s (GOOGL - Free Report) second-quarter 2026 results, scheduled to be released on July 22, are expected to have benefited from solid momentum in Search and Cloud businesses. The momentum in Search is expected to have driven advertising revenues in the to-be-reported quarter. The Cloud business is riding on strong demand for AI infrastructure and an expanding clientele.

The Zacks Consensus Estimate for Google’s advertising revenues is currently pegged at $81.68 billion, suggesting 14.5% growth from the figure reported in the year-ago quarter. The consensus mark for Google Cloud revenues is currently pegged at $22.79 billion, indicating 67.3% growth from the figure reported in the year-ago quarter.

Alphabet has an impressive earnings surprise history. GOOGL’s earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 34.43%.

Click here to know how Alphabet’s overall second-quarter 2026 results are likely to be.

GOOGL’s AI Push Aids Search & Cloud BusinessesGOOGL’s Search business is benefiting from AI infusion. Alphabet is leading the search domain with 91.27% market share, followed by Microsoft’s (MSFT - Free Report) Bing, with 4.68% share, Yahoo!’s 1.28%, Yandex’s 0.79%, DuckDuckGo’s 0.65% and Baidu’s 0.43%, per the latest data from StatCounter.

Alphabet’s Search business is expected to remain the biggest contributor to second-quarter growth. GOOGL highlighted that AI Overviews and AI Mode are increasing user engagement, with users searching more frequently and queries reaching all-time highs. Gemini’s improved understanding of longer and more complex queries is also enabling Google to serve more relevant advertisements, improving advertiser ROI and supporting paid-click growth. The Zacks Consensus Estimate for Search and other revenues is currently pegged at $63.54 billion, suggesting 17.3% growth over the figure reported in the year-ago quarter.

Meanwhile, Google Cloud is expected to have remained a major growth engine in the to-be-reported quarter. Google Cloud has solidified its position as the third-largest provider in the highly competitive cloud infrastructure market against the likes of Microsoft Azure and Amazon’s (AMZN - Free Report) Amazon Web Services. According to Synergy Research Group data, Google Cloud, along with Microsoft, is gaining market share, while Amazon continues to lead with a 28% market share in the first quarter of 2026. Alphabet and Microsoft had 21% and 14% market share, respectively.

Alphabet’s management has noted that enterprise AI solutions have become Cloud's largest growth driver, supported by strong demand for Gemini models, AI infrastructure and security offerings. In the first quarter of 2026, customer acquisition doubled year over year, large enterprise deals accelerated, and the Cloud backlog expanded to more than $460 billion, providing strong revenue visibility into coming quarters.

GOOGL Benefits from Subscription GrowthAlphabet’s subscription business is expected to have contributed meaningfully to the second quarter of 2026. The company reported its strongest-ever quarter for consumer AI plans, driven primarily by Gemini app adoption in the first quarter of 2026. Total paid subscriptions reached roughly 350 million, with Google One and YouTube remaining key contributors, providing a growing stream of recurring revenue.

YouTube is expected to have remained a solid contributor through continued strength in direct-response advertising, Shorts engagement, Connected TV viewing and subscription growth. AI-powered recommendation systems, creator matching and advertising tools are expected to have improved monetization in the to-be-reported quarter.

Zacks Rank & Upcoming Earnings

As Google incorporates more artificial intelligence into search, people are spending more time on Google. Some website operators are crying foul.

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?

Let's take a look at what these Wall Street heavyweights have to say about Alphabet (GOOGL - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

Alphabet currently has an average brokerage recommendation (ABR) of 1.25, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 55 brokerage firms. An ABR of 1.25 approximates between Strong Buy and Buy.

Of the 55 recommendations that derive the current ABR, 46 are Strong Buy and four are Buy. Strong Buy and Buy respectively account for 83.6% and 7.3% of all recommendations.

Brokerage Recommendation Trends for GOOGL

Check price target & stock forecast for Alphabet here>>>

The ABR suggests buying Alphabet, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.

Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.

Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Should You Invest in GOOGL?In terms of earnings estimate revisions for Alphabet, the Zacks Consensus Estimate for the current year has increased 0.2% over the past month to $14.33.

Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Alphabet. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, the Buy-equivalent ABR for Alphabet may serve as a useful guide for investors.

ToplineAlphabet shares jumped on Monday following a report that the Google parent is planning to deploy a new chip to run its Gemini models more efficiently, adding a combined $15 billion to the net worths of cofounders Larry Page and Sergey Brin.

A new AI chip from Google's parent company could reportedly be up to 10 times more energy-efficient.

Corbis via Getty Images

Key FactsShares of Alphabet rose 2.8% to above $356 as of Monday morning, a reversal from the 6.5% decline over the previous two sessions.

Page and Brin, who hold a combined 87.9% of Alphabet’s Class B shares, saw their net worths increase by $8 billion and $7.4 billion, respectively.

Page ($292.4 billion) ranks the second-richest person, directly behind Elon Musk ($781.2 billion), and ahead of Brin ($269.7 billion), according to Forbes’ estimates.

A boost in Alphabet’s stock price came as the company developed a new AI chip, referred to internally as “Frozen v2,” which Google engineers expect to be up to 10 times more energy-efficient than its predecessor, The Information reported Monday.

Alphabet reportedly plans to deploy the chip by 2028 to ease an internal shortage of AI computing power that has strained its operations and forced Google Cloud to turn away customers.

Alphabet did not immediately respond to Forbes’ request for comment.

what to watch forAlphabet will report Q2 earnings after market close Wednesday. The firm is expected to report $117.1 billion in revenue and $2.90 earnings per share, according to FactSet, marking 21% and 25% surges over the same period last year, respectively. Wall Street anticipates quarterly spending to ramp up to roughly $45 billion, a nearly 26% increase over the previous quarter, as Alphabet has joined its mega-cap competitors in a broader build-up of AI infrastructure over the last year. Google Cloud revenue, a measure of demand for Alphabet’s AI products, is projected to have surged 65% to $22.4 billion.

big number87.5%. That’s how much Alphabet’s stock has risen over the last year, including a 13% increase so far in 2026.

key backgroundPage and Brin, who cofounded Google in 1998, have seen their fortunes grow exponentially in recent years. Page’s wealth settled at just under $51 billion in 2020 before rising above $144 billion to start 2025, while Brin’s wealth surged from $49 billion to $138 billion over the same period. A difference in equity between Google’s cofounders is largely attributed to stock trades, as Brin has been more active selling his stake than Page, who last disclosed selling shares in 2022. Brin has also donated Alphabet and Tesla stock to nonprofit groups and to Parkinson’s disease research in recent years, including a $700 million donation last year.

further readingForbesAlphabet Beats Earnings Expectations As Annual Revenue Tops $400 Billion For First TimeBy Ty Roush

Though we're entering the heart of earnings season, don't overlook how valuable the filing of Form 13Fs can be for investors. These quarterly filings allow investors to track which stocks Wall Street's smartest and most successful money managers have been buying and selling.

Few, if any, billionaire investors have proven more successful over multiple decades than Duquesne Family Office's Stanley Druckenmiller. Known for his relatively active trading style and his love for innovative tech stocks, Druckenmiller dumped shares of Google parent Alphabet (GOOGL +3.38%)(GOOG +3.49%) in the first quarter, and piled into the hottest member of the S&P 500 (^GSPC +0.36%): memory titan Sandisk (SNDK +4.38%).

Duquesne Family Office's Stanley Druckenmiller is one of Wall Street's most-followed money managers. Image source: Getty Images.

Duquesne's billionaire boss rang the register on Alphabet According to Duquesne Family Office's mid-May-filed 13F, billionaire Stanley Druckenmiller sent all 385,000 shares of Alphabet (the Class A shares, GOOGL) to the chopping block.

Profit-taking is certainly a logical explanation for Duquesne's boss to ring the register. Alphabet stock practically doubled over the two quarters (the third and fourth quarters of 2025) during which Druckenmiller was a buyer. Alphabet's integration of artificial intelligence (AI) solutions into Google Cloud has helped reaccelerate sales growth for this high-margin platform and sent its stock catapulting higher.

"Google Cloud revenues grew 63% with backlog nearly doubling quarter on quarter to over $460 billion."

Analysts Projection: +52% YoY

Google Results:

- Cloud Revenue: +63% YoY
- Cloud Backlog: +300% YoY$GOOGL $GOOG pic.twitter.com/zNkiP1vcd1

-- Qualtrim (@qualtrim) April 29, 2026 But this may not be the complete story.

Druckenmiller has also gone on record as stating that "AI may be a little overhyped now, but underhyped long term." He likely recognizes that every hyped technological innovation over the last three decades has succumbed to a bubble-bursting event early in its expansion. Though Alphabet is well-diversified, with a virtual monopoly in internet search, it wouldn't be immune if the AI bubble bursts.

Alphabet also isn't the screaming bargain it once was. Its forward price-to-earnings (P/E) ratio of 24 represents a 15% premium to its average forward P/E over the trailing five years.

Image source: Getty Images.

Stanley Druckenmiller found a new AI apple of his eye While Alphabet was given the boot, Duquesne's billionaire chief purchased 38,500 shares of memory storage solutions provider Sandisk. Over the trailing year (as of July 16), Sandisk shares have rallied more than 3,200%, making it Wall Street's top-performing S&P 500 component by more than 2,500 percentage points!

Druckenmiller's optimism likely stems from Sandisk's critical role in AI data centers. The company's NAND flash memory, solid-state drives, and high-bandwidth flash are designed to support high data transfer rates in AI-accelerated data centers.

2027 EPS estimates for SanDisk $SNDK are about to bend backwards in time while still moving parabolically higher: pic.twitter.com/qRsPDqR5KA

-- Consensus Media (@ConsensusGurus) May 3, 2026 The "issue" is that enterprise demand for these solutions far exceeds their supply. This chokepoint is stymying an even faster data center build-out, but also affording Sandisk a level of pricing power and gross margin it's never seen before.

In September 2025, Wall Street was forecasting less than $10 in full-year earnings per share (EPS) for Sandisk in 2027. Today, this EPS forecast is approaching $208. If memory supply shortages persist, Sandisk (and Stanley Druckenmiller) will be sitting pretty.

Reports of a maritime embargo from the Houthis is keeping the Strait of Hormuz in global headlines, says Kevin Hincks, though he expects earnings season to take investors' attention with Alphabet (GOOGL), Tesla (TSLA), and Intel (INTC) reporting this week. He talks about the importance he sees in the earnings.

watch now

Alphabet shares climbed 3% on Monday after The Information reported the company is developing a new server chip, internally dubbed "Frozen v2," designed to run Gemini models more efficiently.

The chip would permanently embed parts of Gemini's architecture directly into the silicon, reducing the number of calculations and amount of data movement required to answer queries, according to the news outlet.

Google engineers project it could serve between six and ten times more tokens per unit of power than the company's newest AI chips, called TPUs, or tensor processing units, The Information said. Frozen would become a more specialized branch of Google's custom-chip portfolio rather than replace its general-purpose TPUs.

According to the report, the company is targeting 2028 for deployment. The project is aimed at easing a major internal compute shortage that has fueled tensions and reportedly forced Google Cloud to turn away outside business.

Just last month, Google agreed to pay SpaceX nearly $1 billion a month to help bridge the gap and meet its enterprise compute commitments.

The trade-off is flexibility. The chip would work with future Gemini models only if Google sticks with the same underlying architecture, according to The Information. Google reportedly currently views Frozen v2 partly as a trial run and does not plan to produce it at the same scale as its TPUs.

Alphabet did not immediately respond to a request for comment.

Read the full story from The Information here.

Google stock chart.

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Alphabet (GOOG 2.06%) (GOOGL 2.05%) is the owner of something most of us use on a daily basis: Google Search. And that has helped pave the way to success for this technology giant. Google Search has been the leading search engine worldwide for years, and as a result, advertisers pay for billions of dollars in advertising quarter after quarter -- ads across the Google platform actually make up the lion's share of the company's revenue.

On top of this, Alphabet also has scored a win in another huge market, and that's cloud computing. As one of the leading players, Google Cloud has generated explosive growth in recent times, particularly due to demand for AI products and services. The stock has climbed 10% this year, though it's been under pressure along with other AI stocks over the past couple of weeks.

Considering the full picture, will Alphabet soar after a potential catalyst on July 22? Let's turn to history for an answer.

Image source: Getty Images.

Alphabet's impressive track record Alphabet has appealed to a broad range of investors in recent years, thanks to its strong market position in the search business and its growth in cloud. The company has delivered impressive earnings growth over time, and it's easy to imagine this continuing well into the future. In the latest quarter, Alphabet's total revenue soared 22% to more than $109 billion, and Google Services and Google Cloud revenue each climbed in the double-digits.

In fact, AI demand is driving tremendous growth at Google Cloud -- backlog there almost doubled from a quarter ago to more than $460 billion in the latest period. That offers us reason to be optimistic about revenue growth moving forward.

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Though Alphabet is heavily investing in the AI build-out, this growth in backlog, general comments from peers about strong AI demand, and the company's history of benefiting from its investments -- as we can see in the chart below -- offer us additional reasons to like Alphabet.

GOOG Return on Invested Capital data by YCharts

In recent days, though, Alphabet and other AI stocks have stumbled amid concerns about the high levels of tech investing in the build-out -- and whether the revenue opportunities justify it. It's impossible to predict exactly what will happen in the future, but so far, the long-term AI story remains intact. AI has already started to address real-world problems and help companies reduce their costs and become more efficient and innovative. And we're in the early days of this use of AI, so a great deal of growth may happen over the coming years.

A catalyst ahead Now, let's consider the potential catalyst on July 22. Alphabet is set to report second-quarter earnings after the market closes.

Will the stock soar afterward? A look at history shows us that Alphabet stock advanced in the five trading days following four of the past five quarterly reports.

Quarterly earnings reportStock performance over five days following reportQ1 2026up 13%Q4 2025down 6%Q3 2025up 3%Q2 2025up 3%Q1 2025up 0.8% Source: Ycharts.

So, history suggests that Alphabet, with a strong track record of climbing after recent earnings reports, would do the same once again. Meanwhile, the current valuation, with the stock trading at 24x forward earnings estimates, is reasonable -- that's another element that may encourage investors to buy the stock.

That said, it's important to remember two things. First, history isn't always right. It's possible that Alphabet will stray from the recent trend -- even if its earnings report is positive. Second, as I mentioned earlier, AI stocks have come under pressure in recent days, and this could continue.

What does this mean for investors? Alphabet's long-term story remains very bright, thanks to its well-established search business as well as its cloud unit. The company is winning in AI too, and this offers growth potential -- even if AI stocks face headwinds in the near term, quality AI players still have bright long-term prospects.

So, Alphabet shareholders may cheer if the stock soars after the earnings report -- but if it doesn't, they shouldn't worry. This tech giant is well-positioned to generate significant earnings growth and share price performance over the long run.

Obchodní aktivita amerických politiků je investory dlouhodobě bedlivě sledovaná. V minulých letech byly pod drobnohledem především investiční kroky bývalé šéfky Sněmovny reprezentantů Nancy Pelosiové (a jejího manžela), od návratu Donalda Trumpa do Bílého domu se pak více pozornosti upřelo právě na něj. Americký prezident v posledním majetkovém přiznání zveřejnil tisíce transakcí uskutečněných prostřednictvím svěřenského fondu. Server Benzinga se podíval na portfolia obou politiků a našel v nich hned desítku shodných titulů.

Společným jmenovatelem většiny shodných pozic jsou technologické firmy a společnosti profitující z rozvoje umělé inteligence. Na seznamu tak figurují jak zástupci Magnificent Seven, tak ale třeba i méně tradiční sázky typu Tempus AI či energetická skupina Vistra.

Mezi nejčerstvějšími přírůstky v portfoliu rodiny Pelosiových jsou Uber a Intel. Paul Pelosi podle zveřejněných dokumentů nakoupil dlouhodobé call opce na obě společnosti s expirací v příštím roce. Trumpův svěřenský fond mezitím letos u obou titulů vykázal kombinaci nákupů i prodejů, přičemž převažovaly nákupní transakce.

Výrazný překryv pak lze zpozorovat u největších technologických společností. Pelosiovi dlouhodobě drží expozici vůči Alphabetu, Nvidii, Applu, Amazonu a Broadcomu, často prostřednictvím opcí, které byly následně převedeny na akcie. Trumpův fond zase během letoška uskutečnil u těchto jmen desítky obchodů, přičemž některé transakce byly v řádu milionů dolarů.

Zvláštní pozornost pak poutá Nvidia, která se stala jedním z hlavních symbolů boomu umělé inteligence. Pelosiovi v posledních letech opakovaně navyšovali svou expozici vůči nejhodnotnější veřejně obchodované společnosti na světě, zatímco Trumpův fond patří mezi nejaktivnější obchodníky s tímto titulem, odhalila analýza serveru Benzinga.

Kromě zavedených technologických gigantů spojuje obě portfolia také orientace na perspektivní segmenty. Zde můžeme zařadit Tempus AI, jež využívá umělou inteligenci ve zdravotnictví, nebo velkého hráče v oblasti kybernetické bezpečnosti Palo Alto Networks. Dalším méně očekávaným jménem je pak energetická společnost Vistra, kterou investoři často vnímají jako nepřímou sázku na rostoucí spotřebu elektřiny datových center.

Deset akcií, které se letos objevily v portfoliích Pelosiové a Trumpa:

Uber Technologies
Intel
Alphabet
Nvidia
Tempus AI
Vistra
Apple
Amazon
Broadcom
Palo Alto Networks

Odlišné investiční přístupy

Benzinga si také všímá toho, že i přes shodu u některých titulů se styl obou táborů výrazně liší. Paul Pelosi je známý využíváním dlouhodobých call opcí, které následně převádí na akcie. Jeho strategie se soustředí především na velké technologické společnosti a strukturální růstové trendy.

To Trumpův svěřenský fond naopak podle zveřejněných údajů realizoval během let 2025 a 2026 desetitisíce transakcí napříč řadou sektorů. Přesto i zde dominují velké americké společnosti a zejména technologické tituly, které tvoří významnou část nejaktivněji obchodovaných pozic.

I keep hitting the buy button on Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction), and the reason is uncomplicated: the loudest bear case against this stock has already collapsed under its own weight, and I do not think the tape has fully absorbed that yet.

Two years back the consensus fear was that ChatGPT and its imitators would gut Google Search. My conviction rests on what actually printed. In the Q1 2026 report, Search & other revenue landed at $60.399 billion, growing 19% year over year, with Sundar Pichai flagging “queries at an all time high”. AI experiences pulled users deeper into Search. That is the whole ballgame for me.

Three Receipts I Keep Coming Back To First, Search is compounding on the very technology that was supposed to kill it. Pichai told analysts that “since upgrading AI overviews and AI Mode to Gemini 3, we’ve reduced the cost of core AI responses by more than 30%”. Query volume up, unit costs down. That is the signature of a durable business.

Second, Google Cloud is behaving like a rocket with a receipt. Cloud revenue hit $20.028 billion, up 63%, with backlog nearly doubling sequentially to over $460 billion. Cloud operating income tripled to $6.6 billion, and Cloud operating margin climbed to 32.9% (up from 17.8% in Q1 2025). CFO Anat Ashkenazi added that “revenue from products built on our GenAI models grew nearly 800% year-over-year”.

Third, the machine is throwing off cash and returning it. FY2025 revenue crossed $402.84B for the first time, EPS came in at $10.81, and management raised the dividend 5% to $0.22 per share. Consolidated operating margin sits at 36.1% with return on equity at 38.9%.

Why Not Microsoft or Meta The reflex alternatives are Microsoft for AI cloud and Meta for digital advertising. My money keeps landing on Alphabet because I can point to the exact number that decides it. Alphabet trades at a forward P/E of 25 while its cloud arm grew 63%, its ad-supported search grew 19%, and consolidated revenue grew 21.8%. Meta does not run a hyperscale cloud. Microsoft does not own a Search franchise or YouTube, where ads clocked $9.883 billion in the quarter. Alphabet is the only name on my screen combining that consumer moat with that enterprise growth at that multiple.

The Risk I Will Not Wave Away Capital expenditures more than doubled to $35.674 billion in Q1, free cash flow dropped 46.63%, and full-year 2026 CapEx guidance was raised to $180 billion to $190 billion, with 2027 expected higher. That is real money and a real ROI question. My answer is that a $460 billion backlog, tripling Cloud operating income, and 800% GenAI revenue growth are the receipts that this spending reflects contracted demand. Pichai said the company operates on a “robust ROIC framework” and is “compute constrained in the near term”. I would rather own a business turning customers away than one chasing them.

What Keeps the Buy Button Active Analysts are running 14 Strong Buys and 43 Buys against zero Sells with a target of $431.91, though the ratings aren’t the trigger. I add because a compounder with 350 million paying subscribers, 16 billion tokens per minute running through its API, and Waymo doing 500,000 fully autonomous rides per week is being handed to me at 25 times forward earnings. The fear was the thesis. The thesis was wrong. I keep buying.

Contact [email protected] for any questions or corrections.

Throughout his storied career at Berkshire Hathaway, Warren Buffett has not been a big investor in tech stocks. However, the famed investor helped Berkshire build two tech positions, which the insurance conglomerate still holds today: Apple (AAPL +0.26%) and Alphabet (GOOGL 2.05%) (GOOG 2.06%).

While I like both stocks, I think Alphabet is currently the better option of the two.

Let's take a closer look at each stock to find out why.

Warren Buffett at an event. Image source: The Motley Fool.

Apple arguably has the best compounding business model on the planet. That's why it's been a longtime Buffett favorite.

The key to Apple's business is its closed-loop ecosystem. Once a consumer buys an Apple device, especially an iPhone, they soon become immersed in Apple's ecosystem. From there, it is tough to switch devices. The reason is that for every photo taken, app downloaded, and subscription bought, it becomes more difficult for users to walk away.

Apple's devices have fairly predictable replacement cycles, which help drive a steady stream of hardware revenue. More importantly, its devices are a gateway to the company's high gross margin services revenue. This includes things like cloud storage, subscriptions, AppleCare, and the cut it gets in revenue from its app store.

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Even bigger, though, are things you may not think of since users aren't directly paying to use them. This includes the search revenue-sharing deal it has with Alphabet, as well as its digital wallet, Apple Pay, from which the company takes a small percentage of every transaction.

With search, Alphabet pays Apple a 36% cut of the ad revenue that comes through Apple's Safari browser on its devices. This is a more than $20 billion annual revenue stream that essentially all falls to profits. That's a lot of money for just letting Google be the default search engine on its devices.

While Apple has a great business, the one knock on the stock right now is its valuation. With Apple recently hitting an all-time high, it brought its forward price-to-earnings (P/E) ratio up to nearly 35 times fiscal 2027 (ending September 2027) analyst estimates. That's not unreasonable for a great business, but it's far from cheap.

Alphabet One of the last big positions Buffett established before he stepped down as CEO of Berkshire was at Alphabet. Buffett has said it was a stock he had missed out on in the past, but apparently, he feels the stock still has a lot of future upside.

There are a lot of reasons to like Alphabet. It is the most complete artificial intelligence (AI) player, with both top chips and AI models. And while it has recently had a setback with its latest AI model, having to delay it due to it missing internal goals, this looks more like a temporary setback.

The model falls short in software coding, but that does not impact where Alphabet is strongest, which is consumer AI. In this area, Alphabet has embedded its AI models into Google Search and uses its distribution advantage (its ownership of the Chrome browser, the Android smartphone operating system, and its search revenue-sharing deal with Apple) and global ad network to drive query and revenue growth.

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Meanwhile, Alphabet's biggest advantage is its custom AI chips, called Tensor Processing Units (TPUs). Alphabet has developed the most powerful custom AI accelerators, making them a strong and much cheaper alternative to Nvidia's graphics processing units (GPUs).

This allows Alphabet to train its models and run inference more cheaply, as well as to get higher margins on its cloud computing offering. Its chips are so well regarded that large customer Anthropic has placed large TPU orders directly with Alphabet partner Broadcom, giving it another high-margin revenue-generation opportunity.

Trading at a forward P/E of below 25 times 2027 analyst estimates, Alphabet is a much cheaper stock than Apple. Given its significant valuation discount to Apple and the strong growth opportunities still in front of it, Alphabet's stock is currently the better buy in my view.

Warren Buffett's successor is putting his own stamp on Berkshire Hathaway (BRKB 0.42%), and it looks a lot more like an artificial intelligence bet than the value portfolio that investors are used to. Nearly 30% of Berkshire's roughly $348 billion stock portfolio is now tied to just two semi-AI-linked names: Apple (AAPL +0.26%) and Alphabet (GOOG 2.17%) (GOOGL 2.05%). Here is why CEO Greg Abel has leaned in.

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The numbers behind the concentration Apple remains the conglomerate's single largest equity holding, accounting for about 20.6% of the stock portfolio. Alphabet has surged into the top five, with its Class A shares making up roughly 7% of the portfolio and its Class C shares another 1.8%. That combined weight is striking for a company that has long been known for spreading its bets heavily across banks, insurers, and consumer staples. Abel has also narrowed the portfolio overall, closing 16 positions and trimming the number of companies Berkshire owns stakes in to 29.

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Why Abel loaded up on Alphabet The Apple stake is a Buffett-era inheritance, but the Alphabet position is very much Abel's doing. Berkshire first disclosed a stake in Alphabet in the third quarter of 2025 and has since tripled it. Abel bought 36.4 million Alphabet shares in the first quarter, then signed off on a $10 billion private placement purchase in June. That deal involved buying $5 billion of Class A shares at $351.81 each and another $5 billion of Class C shares at $348.20 each. The deal was structured to help Alphabet fund an $80 billion push to build out AI infrastructure. Berkshire's Alphabet holding has swelled to roughly $41 billion, pushing it past the iconic Coca-Cola stake to be the portfolio's fourth-largest position.

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The thesis behind the AI tilt This new concentration in tech reflects a genuine shift in philosophy at Berkshire. Abel appears far more comfortable than Buffett was with holding large technology companies sitting at the center of the AI transformation. Even so, Alphabet also meets the classic Berkshire criteria: It possesses a durable competitive moat built on network effects, enormous free cash flow, and a valuation that can be viewed as fair for a wonderful business. Berkshire now views Alphabet as a potential "forever holding" alongside Apple and American Express (AXP 1.70%).

Image source: Getty Images.

With Apple, Berkshire owns a stake in a company that's weaving AI features across the world's most valuable device ecosystem, while Alphabet pairs Google's search dominance with its own leading AI models and cloud business. The Alphabet purchase was made at a price the company itself set for its capital raise, meaning Berkshire effectively bought in as an anchor investor, helping to fund the build-out rather than chasing the stock in the open market. Given that the conglomerate has historically sought out opportunities to invest in assets at less than their intrinsic value,  its decision to participate directly in a company's AI expansion reflects a notable evolution of its playbook. Taken together, the two positions show Abel is willing to concentrate Berkshire's capital among the companies he foresees as being the most durable long-term winners of the AI era.

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The risks worth naming Concentration cuts both ways. Tying nearly a third of the stock portfolio to two stocks means a stumble at either one would hit Berkshire hard. Both companies also trade at richer valuations than the deep-value bargains Buffett built his reputation on, and the AI infrastructure build-out is an expensive race toward a technology that's unproven at this scale. Investors following Berkshire's lead into Apple and Alphabet should understand they are buying growth-tinged tech, not traditional value.

Greg Abel is signaling that Berkshire intends to participate in the AI era rather than watch it from the sidelines. Putting nearly 30% of a $348 billion portfolio into Apple and Alphabet is a bold statement of conviction in two businesses with wide moats and real AI upsides. I think the move is worth studying, but I would treat it as a starting point for research rather than a suggestion that you should match Berkshire's concentrations in your own portfolio.

Alphabet (GOOG 2.06%) (GOOGL 2.05%) has a major event coming up: its second-quarter earnings report. This is one of the few times investors get each year to peek under the hood of a business, and with Alphabet delivering strong results in Q1 2026, investors want to see if it can back them up in the second quarter.

I think the stock is a must-buy before the company reports earnings, as there are some things that could cause the stock to skyrocket.

Image source: The Motley Fool.

Alphabet's cloud computing business takes center stage The biggest thing I'll be watching is Alphabet's cloud computing growth. Cloud computing is becoming a huge part of Alphabet's business, with Google Cloud emerging as one of the top platforms to build and run artificial intelligence (AI) models on. Last quarter, revenue soared 63% to $20 billion.

That blew expectations out of the water, and I'm confident Alphabet will do it again this quarter. Alphabet is spending hundreds of billions on data center construction to meet demand. However, it still doesn't have enough to fulfill it all. Another reason Google Cloud will experience growth is the sales of its custom TPUs. These custom chips offer competitive advantages over GPUs in some applications, and Alphabet is starting to sell them to select clients. This is an entirely new part of its business that emerged last quarter, and it could grow to become an even larger part over the next few years. A booming cloud computing revenue growth rate will confirm the AI build-out thesis and convey an all-is-well message to investors. On the flip side, if cloud growth is slow, it could sound an alarm among investors.

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Alphabet's core advertising business will also be under the microscope, as investors want to know how shifting advertising trends powered by AI are affecting the core Google search business. Last quarter, it didn't have any negative effect, and revenue soared 19% year over year -- pretty good for a business that was left for dead only a year ago.

But why is Alphabet a buy before July 22? I think its stock is priced to soar following earnings. At 25 times forward earnings, Alphabet stock isn't the cheapest around, but it still trades at a discount to some of its big tech peers despite offering a brighter future and a higher growth rate.

GOOGL PE Ratio (Forward) data by YCharts

Stocks like Amazon and Apple trade for 29 and 37 times forward earnings, respectively, and are each growing at a much slower pace (both grew at a 17% clip last quarter versus Alphabet's 22%). Alphabet's dominance in the search space, combined with a rapidly growing cloud computing division, makes it one of the most attractive big tech stocks to invest in now, as growth potential is far greater in these industries than in hardware sales (Apple's phones) or e-commerce (Amazon). Although Amazon does have a strong cloud business, it's not growing nearly as fast as Google Cloud.

If Alphabet reports a blowout quarter, I wouldn't be surprised to see the stock skyrocket to a 30 times forward earnings valuation, which would be 20% upside from here. That's a great return in a short time frame, and if Alphabet can crush its earnings, I think it's entirely possible to make that move quickly.

Key Takeaways The 2026 Q2 earnings season is in full swing, with a flurry of companies on deck to report soon. TSLA and GOOGL help headline the upcoming docket, with each seeing contrasting share performances in 2026. Google Cloud results are key for Alphabet, whereas Tesla's CapEx and margin performance remain critical. The 2026 Q2 earnings season is in full swing following the release of the big banks’ results, with many other notable companies on deck in the coming days and weeks.

Concerning next week’s docket, several Mag 7 members, Tesla (TSLA - Free Report) and Alphabet (GOOGL - Free Report) , are scheduled to report.

Watch Tesla’s CapEx and Margin PerformanceTesla shares haven’t had a strong showing in 2026 so far, down roughly 15% and underperforming and facing mixed post-earnings reactions. Its results in 2026 have been largely positive from an expectations standpoint, exceeding the Zacks Consensus EPS estimate by double-digit percentages in back-to-back prints.

Both EPS and sales expectations have trended higher over recent months, a bullish development as the company gears up to release its results. Earnings are forecasted to climb 22% YoY, whereas revenue is forecasted to see a 12% YoY climb.

Image Source: Zacks Investment Research

Margins have always been a key metric to watch for Tesla, which have largely dictated its price action overall. Its gross margin on a trailing twelve-month basis has recently turned higher after periods of decline, with continued improvement likely to drive significant overall positivity.

Image Source: Zacks Investment Research

It's also just as critical to rememer that Tesla is entering a massive, heavy-spending cycle, recently raising its 2026 CapEx forecast from $20 billion to over $25 billion. The huge spending levels are primarily aimed at constructing the computational and physical infrastructure needed for its real-world AI initiatives, including data centers to power FSD, the Robotaxi network, and more.

Google Cloud Results Remain KeyAlphabet shares have delivered a return on par with the S&P 500 so far in 2026, up roughly 10% and seeing huge positivity following the latest set of quarterly results. Alphabet has overall continued its stellar earnings track record in 2026, beating both EPS and revenue expectations in each 2026 release so far.

Like TSLA, Alphabet has seen bullish EPS and sales revisions for the quarter to be reported over recent months, but the revisions as of late have been more stable than anything. Though there haven’t been upward revisions recently, the stability here is still a positive takeaway. The tech giant is expected to continue its growth trajectory yet again, with earnings and revenue expected to be up 23% and 24%, respectively.

Image Source: Zacks Investment Research

As has been the case, cloud revenues will again be a key sentiment driver concerning the post-earnings reaction for the Mag 7 member. Google Cloud revenue totaled $20.0 billion in its latest release, reflecting a rock-solid 62.7% YoY growth rate. The growth acceleration is precisely what the market wanted to see, explaining the pop in shares following the latest release.

Further acceleration in the YoY growth rate will likely lead to huge positivity yet again from a share momentum standpoint, though it remains a tough hurdle to clear given the huge growth rates already delivered. Our consensus estimate for Google Cloud revenue stands at $22.8 billion, reflecting a 67% YoY change.

Image Source: Zacks Investment Research

Bottom Line

With the 2026 Q2 earnings season in full swing, investors will have a flurry of earnings reports to sort through in the coming weeks. The big banks kicked the period off in style, largely posting solid results while also providing solid read-throughs for coming periods.

And coming next week is a duo of Magnificent 7 members, namely Tesla (TSLA - Free Report) and Alphabet (GOOGL - Free Report) , who both head into their reports with favorable revisions for both earnings and revenue. Google Cloud results will remain key for Alphabet, whereas Tesla's AI-related CapEx and margin picture are key items to watch.

LOS ANGELES--(BUSINESS WIRE)--Glancy Prongay Wolke & Rotter LLP, a leading national shareholder rights law firm, continues its investigation on behalf of Alphabet Inc. (“Alphabet” or the “Company”) (NASDAQ: GOOG) investors concerning the Company's possible violations of the federal securities laws. IF YOU ARE AN INVESTOR WHO LOST MONEY ON ALPHABET INC. (GOOG), CLICK HERE TO INQUIRE ABOUT POTENTIALLY PURSUING CLAIMS TO RECOVER YOUR LOSS. What Happened? On July 16, 2026, Bloomberg news report.

Alphabet shares fell on Friday, extending losses from the previous session after a report suggested Google’s flagship Gemini 3.5 Pro artificial intelligence model is running behind schedule.

Alphabet GOOGL stock declined about 2% on Friday after falling roughly 4% on Thursday following the report.

The weakness came despite continued bullish views from several Wall Street firms ahead of the company's earnings report due on July 22.

According to a Bloomberg report, Google has delayed the broader release of Gemini 3.5 Pro, its most advanced AI model, as it continues working to improve the model’s capabilities, particularly in coding.

The report cited people familiar with the matter who said the delay has frustrated engineers, AI researchers and managers concerned that Google risks falling behind rivals such as Anthropic and OpenAI.

Google first unveiled Gemini 3.5 Pro during its Google I/O developer conference in May, saying the model was being used internally and would be rolled out more broadly the following month.

The reported delay comes at a time when Alphabet is investing heavily in artificial intelligence across its products and cloud infrastructure.

According to the Bloomberg report, Google’s extensive product ecosystem and multiple layers of stakeholders involved in AI releases have contributed to slower product rollouts.

The company is integrating AI across services including Search, Maps and YouTube while balancing internal testing and government engagement.

Responding to reports of the delay, an Alphabet spokesperson told CNBC the company remains focused on rapidly releasing AI products.

"We’re currently testing 3.5 Pro, an upgraded Flash model, and other models with partners, and we’re productively engaged with the US government," the spokesperson said.

The reported delay has intensified investor scrutiny because Alphabet is expected to significantly increase AI-related spending this year.

Analysts forecast Alphabet's capital expenditure will reach approximately $187 billion in 2026, according to S&P Global Market Intelligence.

That figure would consume nearly all of the company's projected $212 billion in operating cash flow, leaving around $25 billion in positive free cash flow, compared with roughly $73 billion generated last year.

The company is under pressure to demonstrate meaningful progress in AI capabilities to justify the enormous spending bill.

Analysts remain optimistic despite reported setbackDespite concerns surrounding Gemini 3.5 Pro, several Wall Street firms maintained positive views on Alphabet.

Wedbush Securities named Alphabet a "top pick" ahead of the company's quarterly earnings.

Analyst Ygal Arounian reiterated an Outperform rating and described Alphabet as the "best-positioned full stack AI offering for the next era of internet and technology."

Arounian said, "Alphabet has the most complete ownership of the consumer distribution layer (Search, Android, Chrome, YouTube), model (Gemini), custom silicon (TPUs), and cloud infrastructure (GCP), at scale."

The analyst expects Alphabet to deliver strong quarterly results as it continues monetizing artificial intelligence across its ecosystem.

Gemini has now been integrated into 13 Google products with more than one billion users each, according to Wedbush.

Five of those products — Search, Android, YouTube, Gmail and Workspace — each serve more than three billion users.

Wedbush also noted that Gemini's monthly active users exceeded 900 million in May, up from 750 million in February, while AI monetization is beginning to surpass the company's traditional search business.

Alphabet shares have declined roughly 5% over the past month, a move Wedbush views as creating an attractive entry point for investors.

Cloud outlook remains a bright spotBMO Capital also reiterated its bullish stance on Alphabet while increasing its price target to $455 from $435.

The firm maintained its Outperform rating after raising fourth-quarter and fiscal 2027 Google Cloud estimates by 2% and 13%, respectively.

According to BMO, stronger cloud demand, expanding capacity, and a growing backlog support improved financial expectations for Google Cloud.

The firm also said Alphabet's search business continues to demonstrate mid-to-high-teen growth.

BMO noted that "Search leadership story remains intact with mid-to-high-teens growth, but new questions are emerging around Gemini model intelligence on reports that Gemini Pro 3.5 is being delayed as it falls short on benchmarks."

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I keep adding to my position in Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction), and the July 22 earnings report will reinforce the trade. What earns my capital, quarter after quarter, is one specific proof point: Google Cloud has quietly turned into the fastest-growing hyperscaler on Earth, and the market is still pricing this company like a search company with an AI problem rather than an AI company with a search franchise attached.

The Cloud Number That Keeps Me Buying In Q1 2026, Google Cloud revenue grew 63% year-over-year to $20 billion, while Microsoft Azure grew 40% and Amazon AWS grew 28% over the same period. That gap is the whole thesis in one line. Backlog nearly doubled sequentially to $462 billion, and CFO Anat Ashkenazi told investors “just over 50% of the backlog” converts to revenue over the next 24 months. Revenue from products built on Alphabet’s generative AI stack, meanwhile, grew nearly 800% year-over-year. This is enterprise AI at scale, sold by the only vendor that owns the silicon, the models, and the distribution.

Cloud operating income tripled to $6.6 billion, with segment margin expanding to 32.9% from 17.8%. High-margin growth is the phrase I keep circling in my notes.

The Rest of the Business Is Keeping Pace Consolidated revenue hit $109.90B, up 21.8% year-over-year, with operating margin at 36.1%. EPS of $5.11 versus a $2.63 estimate was the fourth consecutive EPS beat. Search revenue grew 19% to $60.4 billion with queries at an all-time high. And 350 million paid subscriptions gives me a recurring-revenue base that did not exist five years ago. The company just raised the dividend 5% to $0.22 per share, which is still a token yield, but the direction of travel matters.

Why Not Microsoft or Amazon I own the other names too. I am not buying them here. Microsoft’s Azure is growing at 40%, and Amazon’s AWS at 28%. Both are excellent businesses. Neither is compounding cloud revenue at 63%, and neither trades at Alphabet’s forward multiple. GOOGL sits at a forward P/E of 25 with return on equity of 38.9%. That is a growth-cloud business priced like a mature ad platform. I will take that mispricing every time.

The Risk I Actually Take Seriously Capex more than doubled, up 107.44% year-over-year to $35.67B, pushing free cash flow down 46.63%. Full-year 2026 capex guidance now sits at $180 billion to $190 billion, and management expects 2027 CapEx to significantly increase. If AI demand softens, this spend becomes a stranded asset conversation. What holds the thesis together for me is that Cloud is “compute constrained” at these growth rates. You do not spend $185 billion when demand is a mystery. You spend it when the backlog is $462 billion and doubling.

The Forward Case Analyst consensus sits at 57 buys, 7 holds, zero sells against a target of $431.72. The stock is up 94.28% over the past year and still trades below its 52-week high of $408.37. I am buying a compounder that owns the full AI stack, prints $45.79 billion in quarterly operating cash flow, and just raised its dividend for the second time. The July 22 report is a checkpoint on a position I intend to keep adding to for years.

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Alphabet shares currently trade at $354.46 while Wall Street’s consensus analyst price target sits at $431.72, a gap of roughly 21.8% between current price and fair value.

Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) is the parent of Google Search, YouTube, Google Cloud, Waymo, and the Gemini family of AI models. Wall Street focuses on whether Search can defend itself against generative AI and whether Google Cloud can monetize a $460 billion backlog fast enough to justify a $175 to $185 billion 2026 capex bill.

Alphabet just delivered its strongest quarter in years, yet the stock trades below where nearly every covering analyst thinks fair value sits. One outlier bull has a $515 target that would imply roughly 45% upside from here.

The Selloff That Reopened the AI Brain Drain Debate GOOGL fell 4.44% in the most recent session, closing at $354.46 after opening near $373. The trigger was a report that Google’s Gemini 3.5 Pro model is running months behind schedule, reviving concerns that top AI talent has slipped to Anthropic, OpenAI, and xAI.

Two departures fuel the narrative: Gemini co-lead Noam Shazeer returning to OpenAI after briefly rejoining Google via the Character.ai deal, and Nobel laureate John Jumper leaving DeepMind for Anthropic. Combined with increased DOJ scrutiny of search and advertising dominance and a capex outlook that cut free cash flow by 46.63% year over year in Q1 FY2026, the reaction was sharp relative to peers.

Why the $515 Target Holds Analysts maintained their targets because the underlying business accelerates. Q1 FY2026 EPS came in at $5.11 versus a $2.63 estimate, a 94.10% beat, the fourth straight quarter clearing consensus. Revenue rose 21.8% to $109.90 billion. Google Cloud grew 63% to $20.03 billion and its backlog nearly doubled quarter over quarter.

The $515 case rests on two arguments. First, Alphabet’s $2.7 billion Character.ai licensing agreement demonstrated financial and strategic flexibility to rapidly inject top-tier tech and talent back into its ecosystem. Second, the full-stack moat from custom TPUs to Gemini to distribution across Search, YouTube, and Android is difficult for departing researchers to rebuild elsewhere. Boone does not dismiss the competition. He actively tracks executive and researcher movements as a core risk to his thesis.

Of 64 covering analysts, 14 rate GOOGL Strong Buy, 43 Buy, 7 Hold, with zero Sell or Strong Sell ratings. Recent action has skewed bullish: Wedbush initiated coverage with a $671 target, the most aggressive on the Street, and BofA raised its 2026 and 2027 estimates citing an expected 70% Cloud growth print in Q2. Warren Buffett publicly confirmed he personally initiated Berkshire’s Alphabet stake, though he flagged AI capex as the primary risk to monitor.

How Microsoft, Meta, and Amazon Stack Up The mega-cap AI cohort moved in different directions. GOOGL fell 4.44% while Microsoft (NASDAQ:MSFT) rose 1.38%, and Amazon (NASDAQ:AMZN) fell 1.99%. Alphabet stood out as the loser.

Microsoft trades at $401.10 against a consensus target of $558.66, implying roughly 39% upside. Shares are down 16.69% YTD, the worst in the group. Of 57 covering analysts, 54 rate it Buy or Strong Buy, with revisions largely stable through the drawdown.

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Meta Platforms (NASDAQ:META) trades at $664.54 versus an $826.63 target, roughly 24% upside. Shares are essentially flat YTD. 57 of 63 analysts rate it Buy or Strong Buy, though a $125 to $145 billion 2026 capex guide has weighed on sentiment.

Amazon trades at $249.89 against a $314.35 target, roughly 26% upside. 62 of 66 analysts rate it Buy or Strong Buy, supported by AWS re-accelerating to 28% growth in Q1 FY2026.

The largest analyst-implied upside sits with Microsoft near 39%, ironically the peer with the worst YTD performance. GOOGL’s roughly 22% implied upside is the smallest of the four, reflecting that Alphabet has already re-rated meaningfully higher this year while peers have not.

Where the Stock Stands Now GOOGL currently trades at $354.46 against an average target of $431.72 from 64 analysts, an implied upside of roughly 21.8%. Analyst targets are one data point, not a guarantee.

Shares are up 13.39% YTD, comfortably ahead of the S&P 500’s 10.09% YTD gain, despite the recent one-day drop. Over one year, GOOGL is up 94.28% against 20.27% for the S&P 500. Trailing P/E sits at 28, forward P/E at 25, on TTM EPS of $13.09.

The Case for Alphabet at $354 The bull case rests on Cloud converting its $460 billion backlog into revenue at a pace justifying 2026’s capex, and on management buying talent faster than it loses it. Search reaccelerating to 19% growth is the fact the brain drain thesis must explain away.

The bear case argues Gemini delays are structural, DOJ remedies force meaningful business changes, or 2026 capex compresses free cash flow for longer than one or two quarters.

Consensus points to about 22% upside, fundamentals are accelerating, and the brain drain narrative has yet to show up in the numbers.

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Artificial intelligence has turned from a software race into an infrastructure arms race. The companies building the biggest AI models are discovering that chips, data centers, and electricity are becoming the limiting factors — not customer interest. 

A company spending billions because demand is weak is a warning sign. One that does so because it cannot build capacity fast enough to satisfy customers is a very different story. That appears to be the challenge facing Alphabet’s (NASDAQ:GOOG | GOOG Price Prediction) Google. The company is not struggling to find buyers for AI services; it just can’t produce enough computing power to serve them.

Google’s AI Spending Is Accelerating Faster Than Expected Google is keeping its foot on the AI spending pedal. In Q4 2025, it said capital expenditures would reach $175 billion to $185 billion this year. The market questioned whether the company was spending too aggressively, as it nearly doubled Google’s 2025 spending. Investors feared Big Tech’s AI investments could become a costly spending race.

One quarter later, though, Google reported $35.7 billion in capex during Q1 alone. Instead of slowing down, management raised its full-year capex forecast to $180 billion to $190 billion. The reason was simple: demand exceeded supply. During the earnings call, CEO Sundar Pichai said Google Cloud revenue would have been higher if the company had enough capacity to meet customer demand.

It means Google is not building infrastructure and hoping customers will appear. They are already here — and they are waiting.

A $462 Billion Backlog Shows AI Demand Is Real The clearest evidence is sitting inside Google Cloud’s $462 billion backlog, which nearly doubled in a single quarter. Management expects more than 50% of that backlog to convert into revenue within 24 months. For comparison, Google Cloud generated $43.2 billion in revenue during 2025. The backlog represents more than 10 times that annual revenue base.

The size of enterprise commitments is also expanding. Google said the number of billion-dollar-plus cloud deals signed in 2025 exceeded the combined total from the previous three years. Google’s problem is not finding AI customers. It is keeping up with them.

Google is trapped in a $462B backlog race where chips and power are the ultimate limiting factors—forcing a massive $190B infrastructure surge. © 24/7 Wall St. Internal AI Demand Is Adding More Pressure Bloomberg reported Google delayed the launch of Gemini 3.5 Pro as engineers struggled to meet internal performance goals. It also highlighted an unusual challenge: Google’s own employees are becoming major consumers of AI compute.

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The company required that engineers use AI tools to help generate code. That initiative is designed to improve productivity, but it also increases demand for the same computing resources Google sells to outside customers. In other words, Google is competing with itself for GPUs.

That creates a rare situation. A company running out of AI capacity for its own engineers while holding a $462 billion cloud backlog does not have a reason to cut spending. In fact, it may need to spend even more.

Granted, there are risks. AI infrastructure spending requires enormous upfront investment, and returns will depend on whether enterprise demand remains strong enough to justify the cost. The industry has not yet reached the point where every AI dollar spent guarantees a dollar earned.

That said, Google’s current constraint is the type investors generally want to see: too much demand rather than too little.

Key Takeaway In short, Google’s rising capex is not simply a spending story. It is a capacity story. The company has enterprise customers waiting on a $462 billion backlog, but its own engineers are consuming more AI resources. Management is raising spending because the existing infrastructure cannot keep pace.

The question for investors is not whether Google can find demand for AI. It may be whether it needs to spend even more money on infrastructure while simultaneously building faster the capacity it has already contracted for. It’s not necessarily a bad problem to have.

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