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Google Cloud's backlog just crossed $500 billion while free cash flow turned negative for the first time ever, and Wednesday's earnings report will reveal whether Alphabet's historic spending spree is pulling ahead of its own ability to pay for it.

Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction, NASDAQ:GOOG) reports third-quarter results after the close on Wednesday, October 28. Google Cloud’s backlog stands at $514 billion, and 2026 CapEx guidance runs $195 billion to $205 billion. This report shows which one is growing faster.

Record Cloud Growth Meets Negative Free Cash Flow
Last quarter, revenue rose 24.2% to $119.80 billion, ahead of the $116.91 billion consensus. Google Cloud led again. Revenue there rose 82% to $24.77 billion, speeding up from 63% in Q1 and 34% a year ago, while Cloud operating margin expanded to 35.6% from 20.7%.

Costs grew just as fast. CapEx rose 100% to $44.92 billion, free cash flow came in at negative $5.86 billion — the first time ever — and management raised its 2026 CapEx range from $180 billion to $190 billion. To pay for it, Alphabet raised about $70 billion in equity and debt and suspended buybacks.

Reported EPS of $9.11 included a $99.03 billion equity securities gain, yet shares fell 6.89% on the day of the report. GOOG closed Friday at $317.28, down 5.83% over the past week.

Consensus Calls for Nearly 25% Revenue Growth

Metric
Consensus
Prior-Year Actual
YoY Growth

Q3 2026 Normalized EPS
$3.0047
$2.87
4.69%

Q3 2026 Revenue
$127.85B
$102.35B
24.92%

FY2026 EPS
$20.595
$10.81
90.52%

FY2026 Revenue
$500.15B
$402.84B
24.15%

The full-year EPS figure includes the first half’s equity gains, which makes the quarterly estimate the cleaner gauge of operating profit.

Backlog Conversion and Margins Will Set the Tone
My first focus will be the backlog. It rose by more than $50 billion sequentially last quarter, and management expects to recognize just over 50% of it within 24 months. Sundar Pichai said in July, “We are still in a supply-constrained environment.”

Margins come next. Alphabet planned to lean on third-party capacity in Q3 as a bridge, which management said would create “modest margin pressure,” on top of Wiz integration costs and rising depreciation. You should compare Cloud margin against 35.6% and consolidated operating margin against 34%.

On spending, any change to the 2026 range matters, as does early color on 2027, when management expects CapEx to “increase significantly.” TPU system sales add another variable. That revenue ramps as Alphabet leaves 2026, with the “vast majority” arriving in 2027.

All that CapEx has to be powered, cooled, and connected by somebody, which is the entire point of a free report we put together on seven AI infrastructure suppliers that aren’t the chipmakers: you can grab it here.

Search still has to fund the expansion. Revenue there grew 17% to $63.3 billion, and AI Mode passed 1 billion monthly users. A court has already rejected a forced breakup of Google’s ad-tech business, so any detail on the remaining behavioral remedies could also move opinion.

A $514 Billion Backlog Has to Turn Into Cash
Alphabet beat estimates in all 8 of its last reports. Even so, the stock’s moves on report day ranged from a 9.97% gain to a 6.89% drop, and the market now cares most about how efficiently that capital gets spent. If the backlog turns into revenue fast enough to steady free cash flow while CapEx keeps rising, the spending case gets easier to defend heading into a greater 2027.

Contact [email protected] for any questions or corrections.

In its upcoming report, Alphabet (GOOGL - Free Report) is predicted by Wall Street analysts to post quarterly earnings of $2.94 per share, reflecting an increase of 2.4% compared to the same period last year. Revenues are forecasted to be $111.64 billion, representing a year-over-year increase of 27.6%.

The current level reflects an upward revision of 1.4% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period.

Prior to a company's earnings announcement, it is crucial to consider revisions to earnings estimates. This serves as a significant indicator for predicting potential investor actions regarding the stock. Empirical research has consistently demonstrated a robust correlation between trends in earnings estimate revision and the short-term price performance of a stock.

While it's common for investors to rely on consensus earnings and revenue estimates for assessing how the business may have performed during the quarter, exploring analysts' forecasts for key metrics can yield valuable insights.

Given this perspective, it's time to examine the average forecasts of specific Alphabet metrics that are routinely monitored and predicted by Wall Street analysts.

It is projected by analysts that the 'Revenues- Google advertising' will reach $83.52 billion. The estimate indicates a year-over-year change of +12.6%.

Based on the collective assessment of analysts, 'Revenues- YouTube ads' should arrive at $11.34 billion. The estimate indicates a change of +10.6% from the prior-year quarter.

Analysts forecast 'Revenues- Google Cloud' to reach $29.16 billion. The estimate indicates a year-over-year change of +92.4%.

According to the collective judgment of analysts, 'Revenues- Google subscriptions, platforms, and devices' should come in at $14.85 billion. The estimate indicates a change of +15.4% from the prior-year quarter.

The combined assessment of analysts suggests that 'Revenues- Google Search & other' will likely reach $64.99 billion. The estimate points to a change of +14.9% from the year-ago quarter.

The consensus among analysts is that 'Revenues- Google Services total' will reach $98.42 billion. The estimate suggests a change of +13.1% year over year.

The consensus estimate for 'Revenues- EMEA' stands at $34.62 billion. The estimate points to a change of +15.7% from the year-ago quarter.

The average prediction of analysts places 'Revenues- United States' at $64.36 billion. The estimate suggests a change of +32% year over year.

The collective assessment of analysts points to an estimated 'Revenues- Other Americas (Canada and Latin America)' of $7.15 billion. The estimate indicates a change of +17.9% from the prior-year quarter.

Analysts' assessment points toward 'Revenues- APAC' reaching $22.01 billion. The estimate points to a change of +23.5% from the year-ago quarter.

Analysts expect 'Total TAC (traffic acquisition costs)' to come in at $16.53 billion. The estimate is in contrast to the year-ago figure of $14.88 billion.

Analysts predict that the 'Headcount (Number of employees)' will reach 200,611 . The estimate is in contrast to the year-ago figure of 190,167 .

View all Key Company Metrics for Alphabet here>>>

Over the past month, shares of Alphabet have returned -5.3% versus the Zacks S&P 500 composite's -1.2% change. Currently, GOOGL carries a Zacks Rank #2 (Buy), suggesting that it may outperform. the overall market in the near future. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Alphabet's (GOOG -3.08%) (GOOGL -3.15%) Google is one of the world's largest cloud infrastructure companies, yet it just started paying SpaceX (SPCX -9.14%) $920 million per month -- or $11 billion per year -- to lease xAI's cloud infrastructure through 2029. Let's see why Google is renting that cloud compute from SpaceX rather than building more data centers -- and how that unusual deal could expose it to some unpredictable concentration risks in the future.

Why does Google need SpaceX's data centers? Google controlled 15% of the global cloud infrastructure market in the second quarter of 2026, according to Synergy Research Group, putting it in third place after Amazon (AMZN -4.57%) Web Services (AWS) (28%) and Microsoft (MSFT -2.23%) Azure (20%).

Image source: Getty Images.

From 2021 to 2025, Google Cloud's annual revenue more than tripled from $19.2 billion to $58.7 billion as the cloud and AI markets expanded, and Google seems like a great vertically integrated play on those secular trends. The tech titan builds its own data centers, produces its own custom AI chips, and hosts a broad range of market-leading cloud-based services and apps. It also ties all of those pieces together with Gemini and its other AI models.

But over the past few years, Google couldn't expand that infrastructure fast enough to keep pace with the AI market's explosive growth. It produced enough of its custom tensor processing units (TPUs) for its own first-party cloud services, but most of its customers needed access to Nvidia's (NVDA -4.40%) graphics processing units (GPUs), which are better suited for training other AI models. Most of the top AI companies -- including OpenAI, Anthropic, and Meta Platforms -- use Nvidia's data center GPUs to process their AI tasks.

Nvidia controls over 80% of the data center AI chip market, and it locks in those customers with its proprietary software and services. A large portion of Google's servers already run on Nvidia's GPUs, but it doesn't have nearly enough chips to satisfy the market's demand for Nvidia-powered cloud computing services. To fill that gap, Google is willing to pay SpaceX $11 billion per year for continuous access to a cluster of roughly 110,000 GPUs.

GOOGL Alphabet$324.22-$10.54 (-3.15%)

NASDAQ · As of 4:00 PM ET 10/22/26

Is that a smart long-term decision? Google's deal with SpaceX instantly resolves a major bottleneck for its cloud infrastructure business. But if it had simply bought those 110,000 chips from Nvidia at $30,000-$40,000 apiece, it would have spent only $3.3 billion to $4.4 billion.

However, it would also have had to secure enough power to run those GPUs -- and it can take three to five years to set up new grid connections for data centers. Google would also need to pay massive energy and labor expenses to continuously operate those centers, and the value of its existing GPUs would depreciate as soon as Nvidia launches newer chips.

Moreover, it could take a long time for Nvidia -- which is still selling chips faster than it can produce them -- to actually fulfill that massive order. Instead of dealing with all of that, it makes more sense for Google to just pay $11 billion (less than 2% of its projected 2027 revenue) to instantly increase its cloud computing power and keep pace with Amazon and Microsoft. Paying SpaceX, in which Alphabet owns a 4%-5% stake, also makes more sense than paying a direct competitor in which the company doesn't own any equity.

But over the long term, this deal could expose Google to some major concentration risks. By paying SpaceX billions of dollars per year, it's essentially funding xAI's transformation into a future cloud infrastructure competitor in the generative AI market.

Google's deal with SpaceX further reinforces Nvidia's dominance of the data center market, rather than challenging it with its own TPUs. Moreover, that massive cluster is located at xAI's centralized facilities -- including its Colossus mega-clusters in Tennessee -- so any power failures or disruptions could impact a large portion of its cloud-based tenants.

For now, investors shouldn't fret too much over Google's deal with SpaceX, since it's a win-win situation for both companies. But it also exposes the limitations of Google's cloud infrastructure, as well as some future catalysts for xAI's growing cloud computing business.

Behind a wire fence lies a vast gaping wound of earth. Before Google’s arrival a few months ago, an estimated quarter of a million trees occupied the 330 hectares (815 acres) of forest near the town of Muhos in rural northern Finland. Now they are all gone.

After the tech company illegally stripped the entire area to build a datacentre – taking even the top soil with it – all that remains is a vast expanse of mud indented with the trail marks of machinery, puddles and mounds of earth, roots and branches. Residents say that brown water flowing off the site is going into a stream that feeds the Oulujoki River.

“It doesn’t end. It goes on and on,” says Mari Annala, an ecologist from the Finnish Association for Nature Conservation (SLL), looking at drone footage of the former forest from the perimeter.

Mari Annala is a Finnish environmental expert, researcher and board member of the Oulu region district of the Finnish Association for Nature Conservation. Photograph: Jarno Artika/The GuardianWith 145 new datacentres at various stages of planning, Finland has found itself at the forefront of the tech companies’ latest push. As well as its relative geopolitical and geological stability and abundance of land, the cool climate makes it especially attractive for saving on energy costs.

Earlier this month, Google was ordered by the Finnish Licensing and Supervision Authority (LVV) to temporarily stop work on Muhos and another site about 100km south-east in the village of Otanmäki after it failed to complete the necessary environmental impact assessments before clearcutting the land. The news has prompted widespread outcry and a national reckoning over what role, if any, the country should play in the global rush to build datacentres to keep up with rapid AI development.

Last week, Google’s Finland country manager, Antti Järvinen, apologised for the forest clearings but claimed the company had acted “on the best understanding we had of the legislation at the time”.

In the northern Finnish town of Muhos, the forest has already been cut down on land acquired by Google, with excavators now clearing the ground and rumbling trucks shuttling back and forth to the construction area located next to major power lines. Photograph: Alessandro Rampazzo/AFP/Getty ImagesMuhos and Otanmäki are part of a €13bn AI infrastructure project by Google that has attracted criticism from Donald Trump, who would rather the centres were built in the US and has publicly called for the company to reconsider. It is the biggest ever project of its kind in the Nordic country.

The Finnish government, which has presided over deep spending cuts, has encouraged the investment. Last month, when the Google plans were announced, the country’s prime minister, Petteri Orpo, said attracting investment was a “top priority” and “the value of the data economy extends far beyond direct investment”. He said the Google deal would “deliver lasting benefits for both parties”.

But the revelations over Google’s misconduct have prompted public concern over what these deals mean for nearby communities, energy prices for Finnish households and Finland’s natural environment, a national source of pride. The datacentre push is likely to become a key election issue when Finns go to the polls in April.

Google’s clearcut area is 3km long and 2km wide, 330 hectares in total, and 400 metres from the Oulujoki River. Photograph: Jarno Artika/The GuardianIn addition to the 250,000 trees felled at Muhos, Annala estimates that an additional 150,000 trees were felled at Otanmäki. Because the trees have been felled illegally, she says wood from the two sites cannot be sold to wood-processing plants.

The move has also prompted questions over why Finland’s renewable energy sources are being used to power international corporations.

More than 93,000 people have signed a petition demanding more datacentre regulation and a fee to compensate local communities for environmental damage. Since the scandal broke, Orpo has described what happened in Muhos as a “cold shower”.

Hanna Halmeenpää, chair of SLL’s board, said she had been incredulous when she discovered Google’s law breaking. “At first I couldn’t believe it,” she said. “I have never heard that any company has done anything like this in Finland.” She said the system depended a lot on trust, which she believes Google took advantage of. “They bought the vast land area and they just started to cut it, just like that,” she said. “It’s pure arrogance and it’s amazing.”

Three electrical pylons next to the Google clearcut. Photograph: Jarno Artika/The GuardianThe speed of developments had shocked the country, she said. “Many people are just watching the news and asking each other: ‘What’s happening now? What can we do about it? And do we have to take all these datacentre projects in Finland?’”

Jussi Kangasharju, head of computer science at the University of Helsinki, said that while datacentres brought a limited number of jobs, potentially boosting the local economy, the benefits on a national level were minimal. “Really, for Finland, there are no benefits,” he said. “They are international companies serving international customers. Very little corporate taxes go to Finland. Datacentres ultimately have very little benefit for others except the datacentre operator.”

Hanna Halmeenpää, chair of the board of the Finnish Association for Nature Conservation, near the site where Google’s new datacentre is to be built in Muhos. Photograph: Alessandro Rampazzo/AFP/Getty ImagesWith legislation still playing catchup, there is a rush to get projects under way as fast as possible.

Some are calling for a centralised body to coordinate datacentre projects, rather than leaving so much of the decision-making down to municipalities that are likely to prioritise the immediate needs of the local area.

In Muhos and Otanmäki, there are people who support the projects, along with the jobs and land taxes they will bring into the local area. But many believe they have been sold short by municipalities.

Google has illegally stripped the entire area, removing even the top soil. Photograph: Jarno Artika/The GuardianAntti Jakonen, who lives in Muhos, said that, although the trees felled represented a small fraction of Finland’s overall forests, he objected to the manner in which it had been carried out. “It has been done in the wrong way. American style. No sense. No sense at all,” he said. The former entrepreneur and fisher wants Google to compensate by helping to restore the local salmon population destroyed decades ago by hydropower.

In Otanmäki, the disruption to nature and to residents’ daily lives is being vividly felt. When the trees were felled, the wolves who had lived there came to the village, said Anni Ranta, 53, whose family has lived there for generations.

Pentti Korhonen, a wilderness guide, has lived in Otanmäki for 12 years. Photograph: Jarno Artika/The GuardianA former mining village, the area is known for its rare earth elements. Ranta’s family live at the centre of the village next to a triangular church spire and a former bar that has been empty for years. The peaceful forest used to extend for miles from the village. Now the sound of building work next to the clearcut Google site reverberates.

“We had wolves coming into the village because all the wild animals moved out of the forest,” said Ranta. “They fled. What worries me about the datacentres is also the noise because this is hardrock soil. Even when we are standing here talking,” she added, stamping her feet, “it’s like a drum.”

Such is her strength of feeling against the arrival of Google that she is thinking of moving out. She also fears the datacentre could make the village a target for Russia, with whom Finland shares a long border. “I don’t want them here,” she said of Google. “I don’t want them in Finland at all. I don’t like the whole idea of AI and the world changing and the way it’s changing. It’s going too fast, too soon.”

Vesa Hyyryläinen, a biologist, drives past the construction area next to the Google clearcuts in Otanmäki. Photograph: Jarno Artika/The GuardianHer father, Pentti Korhonen, a retired wilderness guide, said that since the forest was destroyed, the water in the stream has turned brown. “There is no need at all for datacentres in Finland. No need for datacentres at all,” he said.

Vesa Hyyryläinen, chair of the local SLL district, said three-toed woodpeckers nesting in the forest had been pushed out. “All of us nature conservationists are very worried about our Finnish political situation and politics,” said the biologist and osprey expert. “I wonder why we have to sacrifice so much of our nature. They give everything away too easily.”

He said, however, that he understood why authorities were trying to bring in new sources of investment and jobs, given the region’s ageing population. “Young people go to Helsinki and Berlin and Paris,” he said. “There are so few people. We have to sacrifice.”

Hyyryläinen said: ‘I wonder why we have to sacrifice so much of our nature. They give everything away too easily.’ Photograph: Jarno Artika/The GuardianVeli-Matti Uski, director general of the ministry of environment, said the government was “monitoring the general development of the [datacentre] sector, [and the] application of its legislation, and is prepared to propose legislative amendments as necessary”.

Google said it was working to protect water quality at the Muhos site, and that it planned to plant trees across 130 hectares there. Conservationists say that figure is too low to have any real impact in comparison to the damage done by the tree felling.

A spokesperson said: “We have operated in Finland for 15 years and have always worked to meet or exceed zoning, environmental, health and safety requirements.

“After receiving the LVV letters on 6 October, we stopped preparatory works at Muhos and Kajaani [where the Otanmäki site is located] and have submitted a formal response to LVV confirming this.

“We will fully comply with LVV’s requests in this matter. We look forward to maintaining an active, open dialogue with all authorities to strengthen our partnership with Finland and local organisations.”

Google is facing a bipartisan Senate grilling over its aggressive push to put artificial intelligence in American classrooms amid mounting concerns that the technology could harm students’ academic performance and mental health.

Sens. Richard Blumenthal (D-Conn.) and Josh Hawley (R-Mo.) sent a letter Wednesday to Google CEO Sundar Pichai demanding answers about what the search giant knows about the potential risks its AI products pose to children, as first reported by the Wall Street Journal.

The two lawmakers wrote in the letter that they harbored “grave concern” that Google’s “aggressive push of AI products to children in schools is threatening the academic success and overall wellbeing of an entire generation.”

Google’s aggressive push to put artificial intelligence in classrooms has drawn Senate questions amid fears the technology is harming students. dpa/picture alliance via Getty Images
Blumenthal and Hawley demanded to know the extent of Google’s knowledge about those potential harms and why the company has made AI integration the default on educational devices.

In one of their most pointed demands, the senators asked whether Google has identified instances in which its classroom AI tools “encouraged a minor to engage in harmful behavior, emotional dependence, or failed to detect signs of suicidal or self-harm ideation.”

Sen. Josh Hawley (R-Mo.) joined his Democratic colleague in demanding answers about Google’s AI products and their potential impact on children’s mental health. Getty Images
The lawmakers also pressed Google to explain what safeguards it has implemented to prevent chatbots from engaging in inappropriate emotional exchanges with children, citing the case of a Maryland teenager who was hospitalized after developing an intense dependence on the company’s AI.

They demanded an accounting of Google’s promotional efforts to expand AI adoption in schools, including how much the company has spent on such programs.

“Google is forcing their AI products into classrooms across America, and children are paying the price,” Blumenthal and Hawley wrote in the missive, a copy of which was obtained by The Post.

The inquiry follows a bombshell Sept. 30 investigation by the Journal that detailed how Google’s AI tools have fueled academic and emotional dependence among students, raising questions about the company’s efforts to promote the technology despite warnings from its own researchers.

Sen. Richard Blumenthal (D-Conn.) demanded that Google disclose whether its AI tools have encouraged harmful behavior or emotional dependence among children. Getty Images
The newspaper interviewed more than 60 teachers, school administrators, parents, students and clinicians who described children increasingly relying on AI to complete assignments, answer basic questions and navigate personal problems.

Google’s researchers have also warned that the technology could undermine children’s cognitive development and emotional well-being, according to the Journal’s review of more than a dozen company research papers and interviews with current and former employees.

“Children need opportunities to work through uncertainty, make mistakes and discover that they can solve problems with support,” behavioral scientist Dr. Abbie Maroño told The Post.

“If AI repeatedly supplies the answer before they have tried, it can remove opportunities to develop those skills.”

Maroño also warned that chatbots can create a misleading sense of trust through their reassuring responses.

Google CEO Sundar Pichai has until Nov. 2 to answer lawmakers’ questions about potential risks posed by the company’s AI tools in classrooms. Bloomberg via Getty Images
“A response can feel caring without being accurate or appropriate for that child,” she said.

“Systems should be independently tested for how they respond to distress, repeated reassurance-seeking and a child treating the chatbot as their only source of support.”

Google has insisted that its Gemini chatbot has special safeguards to prevent children from developing emotional attachments to the technology or receiving responses that reinforce potentially harmful beliefs.

In an April 7 policy statement, Google outlined “protections designed to prevent Gemini from acting like a companion,” along with safeguards intended to discourage emotional dependence by avoiding “language that simulates intimacy or expresses needs.”

The company also said it had trained Gemini “not to agree with or reinforce false beliefs,” instead steering users toward objective information and real-world support.

Google said it was introducing a simplified “one-touch” interface designed to connect users experiencing suicidal thoughts or other mental health crises with professional support through calls, texts or online chats.

Google’s Gemini chatbot has come under scrutiny after reports that students increasingly rely on AI for schoolwork and emotional support. AFP via Getty Images
The company also announced that its philanthropic arm, Google.org, would provide $30 million over three years to support crisis hotlines worldwide.

Google acknowledged that AI presents new mental health challenges and cautioned that Gemini “is not a substitute for professional clinical care, therapy, or crisis support for those who need it.”

The senators gave the company a Nov. 2 deadline to provide answers.

The Post has sought comment from Google.

SummaryAlphabet Inc./Google's negative FCF and rising leverage heighten scrutiny of AI investment returns ahead of Q3 earnings - especially given intensifying industry capital constraints and tightening financial conditions.Gemini also faces growing monetization risks across both consumer and enterprise end-markets, as Meta Platforms' Muse agent and SpaceX Super Intelligence's Grok Bot gain traction in the respective segments.However, robust compute demand and favorable pricing tailwinds, validated by SpaceX Super Intelligence's Q3 results, support potential Google Cloud earnings upside despite near-term margin pressures.Coupled with Google's vertically-integrated AI ecosystem and expansive consumer reach, the company remains well-positioned for sustained operating leverage improvements and earnings upside, reinforcing underappreciated prospects for a stronger ROI trajectory. hapabapa/iStock Editorial via Getty Images

Alphabet Inc./Google (GOOG/GOOGL) faces mounting headwinds heading into its upcoming Q3 earnings on October 28. The company’s growing reliance on external financing after its recent shift into negative FCF amid the

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This has been a year of historic change for the trillion-dollar conglomerate that Warren Buffett built. Following the Oracle of Omaha's retirement as Berkshire Hathaway's (BRKA +1.36%)(BRKB +1.43%) CEO on Dec. 31, the oversight of the company's day-to-day operations and its $363 billion portfolio passed to Greg Abel.

It took Buffett's understudy just one quarter to really shake things up. When the dust cleared after March, Berkshire's new boss had sent 16 stocks to the chopping block and pared down six others. Perhaps even more eye-opening, Abel put tech stocks on the menu. Following aggressive purchases of Google parent Alphabet (GOOGL -1.14%)(GOOG -1.10%) in the first half of the year, Warren Buffett's successor has now turned his attention to tech-driven acquisition platform Bending Spoons (BSP -0.22%).

The oversight of Berkshire's $363 billion portfolio passed to Greg Abel after Warren Buffett's Dec. 31 retirement. Image source: Getty Images.

Alphabet is the new "Apple" of Abel's eyeDuring the Oracle of Omaha's more than half-century as CEO, arguably no company became more of a pillar for Berkshire's investment portfolio than Apple (AAPL -1.00%). Just three years ago, it accounted for nearly 45% of Berkshire's invested assets.

However, Buffett was never particularly adept at investing in tech stocks. His attraction to Apple had less to do with its tech innovations and everything to do with its customers' loyalty and willingness to pay hefty premiums for Apple's physical devices (iPhone, Mac, and iPad).

It took just a few months for Alphabet to become for Abel what Apple was for Warren Buffett.

GOOGL Alphabet$340.28-$3.91 (-1.14%)

NASDAQ · As of 4:00 PM ET 10/20/26

While Berkshire's current and former bosses appreciate Alphabet's virtual monopoly -- Google accounted for approximately 90% of global internet search traffic in September -- it's the company's artificial intelligence (AI) ambitions that intrigue them.

Since Alphabet integrated generative AI and large language model solutions into the world's No. 3 cloud infrastructure services platform, Google Cloud, sales for this high-margin segment have gone parabolic.

Image source: Getty Images.

Berkshire's new boss just went shopping in the tech space againBut it's not just Alphabet that has Abel's attention in the tech space.

According to an Oct. 14 filing with the Securities and Exchange Commission, Berkshire is acquiring 10 million shares of Bending Spoons via private placement at $33 per share. This $330 million investment follows a $600 million investment at the company's initial public offering in July.

Bending Spoons' business strategy in some ways mirrors Berkshire Hathaway, but with a tech and AI twist. Berkshire's market cap grew to $1 trillion by acquiring roughly five dozen companies and buying pieces of others, which are typically held for long periods.

BERKSHIRE HATHAWAY INVESTS ANOTHER $330 MILLION IN BENDING SPOONS, LIFTING ITS STAKE TO 4%
The private placement of 10 million shares at $33 each follows Berkshire's $600 million investment at Bending Spoons' July IPO, per the company https://t.co/wkg8AzIh3N

— IPO Newsroom (@IPONewsroom_) October 14, 2026
Bending Spoons acquires tech-based platforms, using its software, AI, price hikes, layoffs, and other tools to make them more efficient and/or to enhance subscription sales. Thus far, this Italian-based acquisition engine has purchased AOL, Vimeo, Brightcove, Eventbrite, and WeTransfer, among other brands.

The lure of Bending Spoons is that its tech-driven, AI-first approach can minimize costs, boosting margins and profits with reasonably little effort. Furthermore, emphasizing subscriptions should lead to predictable, high-margin sales.

Bending Spoons is already profitable and sporting an exceptionally fast growth rate. With Berkshire Hathaway's new boss as one of its biggest supporters, the sky's the limit.

Alphabet Inc (NASDAQ:GOOG) could deliver a modest earnings beat next week as Google Cloud growth and rising demand for its custom AI chips offset signs of slowing Search growth, according to Bank of America. 

The firm forecasts third-quarter revenue of US$111.4 billion and GAAP earnings per share of US$3.07, ahead of the Street’s US$111.0 billion and US$2.98 when Alphabet reports on October 28. 

Cloud is the likeliest source of upside. BofA sees growth of 93%, against consensus of 89%, driven by expanding capacity and incremental TPU sales.  

Search growth is expected to land in line with the Street at 15%, though BofA’s checks suggest some deceleration in the quarter.  

BofA expects operating expenses of US$33.5 billion, below the Street’s US$34.3 billion, helped by lower depreciation and amortization of US$8 billion versus US$8.9 billion. It sees operating income beating estimates, though legal charges and the start of SpaceX capacity in September could weigh on EPS. 

On the earnings call, BofA will watch search volumes, a potential consumer agentic launch, Gemini 4 capabilities and any data on TPU sales and outlook, which it calls a key 2027 upside case. Investors will also look for Cloud growth relative to Microsoft, which reports the same day. 

BofA estimates 2026 capital expenditures of about US$200 billion, compared with the Street’s US$202 billion, and about US$300 billion in 2027, with a bias to the upside.  

For the fourth quarter, BofA forecasts revenue of US$123.9 billion and EPS of US$3.33, in line with the Street. 

BofA reiterated its Buy rating, saying Alphabet is well positioned with differentiated AI assets, proprietary models, custom silicon and broad distribution.  

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Google's cloud division competes with Amazon and Microsoft for enterprise customers. Bloomberg/Getty Images Google Cloud is experiencing outages in London that appear to have knocked out a number of banking services.

An update on Google Cloud's status dashboard states that it's seeing service issues at its europe-west2 region, which is based in London.

A handful of banking apps and services, including Halifax and Revolut, reported issues on Tuesday that coincided with Google Cloud's disruptions. Some companies said that the Google Cloud outage was the cause, while others attributed it to an unnamed third-party provider.

Users of some affected banking apps have said in social media posts that they can't make card payments, log in to the app, or transfer money.

"We can confirm that all our customers' money and data are safe. We've been working to fix the issue since it was identified this morning and apologize to anyone affected and for any inconvenience caused," Revolut said in a statement. The outage is due to Google Cloud, a person familiar with the matter said.

"We're aware some customers are having issues with our app and online. We're sorry about this and are working hard to fix it," Halifax posted on X.

Emma, a popular UK budgeting app, also reported outages on Tuesday. "Emma is currently down due to a Google Cloud outage affecting services in London since 7 a.m. This is a technical outage, not a security issue," the company said on X.

A Google spokesperson said the company was investigating the issue and referred Business Insider to the status dashboard, which said a "power event" caused the issue but has since been "mitigated."

Google was seeing some "recovery of services" by around 8 a.m. ET, and "tentatively" expected a full recovery by 9 a.m. ET, according to the dashboard.

Emma is currently down due to a Google Cloud outage affecting services in London since 7am. This is a technical outage, not a security issue. We're monitoring closely and will update here as soon as the app is back. Sorry for the disruption 🙏

— Emma (@emma_finance) October 20, 2026 Some have taken to X to share how the outage was disrupting their lives. One person said they've had to cancel their beauty appointments in Japan, and another said their card was declined at the airport and they couldn't reach the support team.

The outage also appears to have affected non-finance companies, too, according to Downdetector, a site that tracks online service disruptions.

An X account for DPD, a delivery service, said in a post that its website is affected, and the web-hosting platform SiteGround said the outage has hit its UK data center. SiteGround said in its post that its engineers are working with Google Cloud engineers to address the issue.

The UK's courts and tribunal service said that it was experiencing issues with its cloud-based video tools for remote hearings on Tuesday. "We're working with our technology partners to restore service," an account for the government service wrote in an X post.

The Google Cloud outage comes as the tech giant has competed with Amazon and Microsoft to win business from enterprises, startups, and governments, particularly amid the AI boom. Reliability is a big promise built into these deals, as outages can have costly consequences for customers.

Google is not alone in being affected by outages, though: Amazon, Microsoft, and others have suffered downtime this year.

This is a developing story. Check back for updates.

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Alice Tecotzky is a reporter on the Finance desk, based in New York City. She writes about JPMorgan and what it's like to work on Wall Street. Have a tip? Email her at [email protected], reach her on Signal at alicetecotzky.05, or follow her on X @atecotzky.Alice graduated from Columbia University in May 2024 with a degree in English. Before she joined Business Insider, she covered breaking news at the Daily Beast and education at the Atlanta Journal-Constitution.

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Hugh is a senior correspondent at Business Insider where he writes about Google, tech, and wealth. His work has been cited by The New York Times, Bloomberg, Reuters, The Wall Street Journal, and other outlets.Get an alert whenever I publish a story.Got a tip? You can reach him using the secure messaging app Signal (hughlangley.01) or email ([email protected]). We can keep sources anonymous.

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Google CEO Sundar Pichai.

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AI is changing how Google employees work — and how Google hires them.

The company has been testing several AI-related changes to its hiring process for software engineers, according to documents reviewed by Business Insider. These changes, which Google has been rolling out in phases throughout this year, include allowing the use of AI in coding interviews and permitting interviewers to use Gemini to give candidates feedback.

Many engineers are also now expected to show some degree of AI fluency as a bare minimum, the documents show.

In May, Business Insider reported that Google was piloting ways to integrate AI into the interview process with a small handful of orgs. This included a new "code comprehension" interview in which candidates are assessed on AI fluency and prompt engineering. Candidates can also use Google's Gemini AI as an assistant during the interview.

The new formats have since been rolled out more broadly across the company, according to the internal documents. However, a spokesperson said they were still considered to be in the pilot phase for now.

"We're piloting updates to our interview process for software engineers, including evaluating for AI fluency, to be more reflective of how our teams are operating," Brian Ong, vice president of recruiting at Google, told Business Insider in a statement.

Like other companies, Google is adapting its hiring process to keep pace with the huge transformation AI is having on software engineering. As developers increasingly rely on AI coding assistants, hiring companies want to know how competent they are with these tools.

In April, Google said that three-quarters of new code created at the company is generated by AI and reviewed by humans, a trend that has since continued across the tech industry. Google has said that its employees are increasingly using the company's own Gemini models to both improve other Google products and to build the next generation of Gemini.

The documents say that for some roles, including software engineering, AI fluency and AI product integration are now used as measures of a candidate's abilities. A Google spokesperson said that AI fluency is a requirement for all software engineering jobs, while AI product integration is required for most roles outside entry-level positions.

Google is also piloting the use of Gemini for interview transcription and note-taking in some job interviews conducted via the company's videoconferencing platform, Google Meet, one document shows.

Google wants to speed up the feedback process using AI, too. The same document states that Google is working to enable interviewers to use Gemini to draft role-tailored feedback.

As Google builds out this new interview system, employees were told they may be asked to participate in some of the pilots — but were warned against using AI tools to generate their own interviewing "solutions."

"Do not use GenAI or LLMs to create your own standalone solutions or agents for hiring or interviewing use cases," the document states, referring to large language models.

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Google and McKinsey have agreed to buy 320,000 metric tons of carbon removal credits over 10 years in its first-ever silvopasture project, as part of its commitments ​through the Symbiosis Coalition, in what is an emerging approach to climate mitigation.

The long-term ‌purchase agreements announced on Monday will support an effort by Working Trees, a climate technology company, to convert degraded cattle pasture into mixed-species systems across Brazil's southeastern Amazon and Cerrado regions, the coalition said.

Silvopasture integrates trees into cattle pastures, ​allowing ranching to continue while boosting carbon sequestration and reducing pressure for deforestation.

The deal ​will help fund the restoration of 8,700 hectares (21,500 acres) of degraded and semi-degraded ⁠pastureland as part of a broader 50,000-hectare project and is one of the first attempts to ​deploy carbon-funded silvopasture at a larger scale.

"Silvopasture, within the various different approaches for sequestering carbon via natural ​systems, is one of the pathways with the most promising potential for scale. And carbon finance has a role to play in financing that solution," Julia Strong, executive director of the Symbiosis Coalition, told Reuters.

The coalition, whose members include ​Alphabet's (GOOGL.O) Google, Microsoft (MSFT.O), Meta (META.O) and Salesforce (CRM.N), focuses on long-term carbon offset contracts, with pledges for more than ​20 million tons of offsets by 2030.

Working Trees plants rows of commercial timber and native tree species directly into ‌existing ⁠cattle pasture, leaving space for grazing.

The company says the model improves cattle productivity while generating future timber revenue that encourages landowners to maintain the systems after carbon-credit income declines.

"This project and the potential to scale to millions of hectares in this part of Brazil is a really exciting opportunity to ​showcase what good looks ​like," Strong said, adding ⁠that Working Trees had demonstrated the model through a pilot project.

Working Trees Chief Executive Leif Gonzales-Kramer said the long-term purchase commitments were critical to unlocking ​investment for such projects.

"If you believe that the world will continue to ​eat beef and ⁠that the world will take climate action seriously, the only way that you can actually achieve both at the same time is through silvopasture," he said.

Brazil's nascent carbon market has attracted increased interest from investors and lenders ⁠as ​companies seek high-quality carbon-removal projects to meet climate goals.

Technology companies, ​in particular, are looking for ways to offset emissions linked to the rapid expansion of energy-intensive artificial intelligence infrastructure. Some critics, however, ​say the offsets allow polluters to avoid reducing their emissions.

One investing strategy separates Alphabet from every other AI giant, and it shows up most clearly when you stack the balance sheets side by side against Microsoft and Amazon.

My Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) position has grown repeatedly this year, and every earnings report adds to my conviction. It comes down to one strategy. Vertical integration gives Alphabet ownership of the entire artificial intelligence (AI) stack. It makes the Gemini models, designs its own TPU chips, rents that compute through Google Cloud, and sells AI to billions of people through Search and YouTube. Every layer it owns is a layer it never pays someone else for. For a retirement portfolio I plan to hold for decades, that kind of control is what I want to own.

Three Numbers That Keep Pulling Me Back
First, cloud growth keeps speeding up. Google Cloud revenue reached $24.77B in Q2 FY2026, up 82% YoY. Two quarters earlier it grew 48%, and a year earlier it grew 34%. Backlog rose from $155 billion in Q3 2025 to over $460 billion by Q1 2026. That backlog is signed demand.

Second, AI is expanding Search. Revenue from Search and related lines rose 17% to $63.27B, while the Gemini App reached 950 million monthly active users and nearly 90% of Fortune 100 companies use Gemini Enterprise.

Third, profits are growing faster than sales. Operating income rose 30.4% to $40.77B on revenue growth of 24.2%, and Q2 marked the 12th straight quarter of double-digit revenue growth. Return on invested capital stands at 29.60%.

How Alphabet Stacks Up Against Microsoft and Amazon
The obvious alternative is Microsoft (NASDAQ:MSFT). Azure grew 43% in its latest quarter, trailing Google Cloud’s pace, and the stock trades at a P/E of 29 against Alphabet’s 15. Alphabet’s trailing multiple gets help from equity gains, so I also check its forward P/E of 23.

Amazon (NASDAQ:AMZN) gave AWS 37% growth, yet the stock has a P/E of 35, debt-to-equity of 0.37, and interest coverage of 35.2x. Alphabet’s debt-to-equity is 0.143, and its interest coverage is 175.5x.

Risk That Keeps Me Disciplined
Alphabet guided for $175B-$185B in 2026 CapEx, Q2 free cash flow came in at -$5.86B, borrowings rose from $46.5B to $98.2B, and buybacks were suspended in Q2 2026. A $49.6B equity raise dilutes me. Reported net income also includes a $99.03B unrealized equity securities gain, so I look past headline EPS.

Operating cash flow still grew 40.8% to $39.069 billion and net debt stands at just 0.19 times EBITDA. Alphabet is borrowing against a backlog it has already signed.

Why Alphabet Stays at the Core of My Portfolio
Alphabet raised its dividend 5% to $0.22 a quarter even while spending heavily, and the stock has returned 737.14% over ten years. Chief executive Sundar Pichai called its “differentiated, full stack approach to AI” the engine behind the results, and the numbers back him up. I stay invested because Alphabet owns more of the AI stack than any other company I follow.

Contact [email protected] for any questions or corrections.

Alphabet (GOOG -2.32%) (GOOGL -2.47%) is set to report its third-quarter earnings on Oct. 28, and all eyes will be on the company's cloud computing business. Google Cloud is on track to become the company's largest driver of operating income growth in the next few quarters. And with the massive amount of capital management is piling into building more compute capacity, it's become the biggest focus of investors, who want to see a good return on that investment.

After Google Cloud revenue growth accelerated to 82% in the second quarter, I predict the segment will more than double revenue in the third quarter. Here's why, and what it means for Alphabet shareholders.

Image source: The Motley Fool.

Google Cloud is set for another big step up in revenue
There are several reasons to expect further acceleration in Google Cloud revenue for the third quarter.

If you simply look at Alphabet's spending, it provides a strong signal. There's a delay between when Alphabet spends capital and when it can start monetizing the assets it's spending on. The average data center takes a couple of years from groundbreaking until it's ready for servers and networking equipment, and there's about a three-month delay between buying a bunch of server racks and getting them online for service. Considering Alphabet's capital expenditures have accelerated in every quarter since the start of 2025, it's a good bet revenue will continue to accelerate as well.

The likelihood is supported by management's reiteration that it's still capacity-constrained. So, the servers it puts in place are highly utilized right away. Management says it expects to recognize half of its $514 billion revenue backlog over the next 24 months, averaging $32 billion per quarter. What's more, management said customers are exceeding their commitments by more than 50%, pushing the potential average closer to $50 billion per quarter.

The second factor to consider is that Alphabet is accelerating revenue next quarter by offloading more of its workload to neocloud companies. "We plan to expand the use of third‑party capacity in Q3 as a bridging strategy while we build out more internal capacity," CFO Anat Ashkenazi said on the company's second-quarter earnings call. She warned that it will put pressure on Google Cloud's margin, but allows the company to "capture greater overall value."

GOOGL Alphabet$340.59-$8.63 (-2.47%)

NASDAQ · As of 4:00 PM ET 10/16/26

The last factor that could drive Google Cloud revenue is the company's plans to sell its custom TPU chips directly to third parties. Direct TPU sales will have a relatively small impact on revenue but should provide a significant step-up from the second quarter. Alphabet's inventory on its balance sheet climbed to $10 billion, up from $2.4 billion at the start of the year. That represents potential sales, mostly of TPUs for which it's already contracted.

In order for Google Cloud revenue to grow 100% year over year, it needs to top $30.3 billion. That's about $5.5 billion more than it earned in the second quarter. That's a tall order, to be sure, but based on Alphabet's spending, plans to offload some capacity, and its burgeoning TPU business, it's within reason.

What accelerating cloud revenue means for Alphabet investors
While Google Cloud revenue has accelerated, many investors remain concerned about Alphabet's ability to produce strong returns on its artificial intelligence spending. The company reported negative free cash flow for the first time as a public company last quarter, and free cash flow is expected to fall deeper into the red over the next few quarters.

That's weighed heavily on the stock price. Shares have dropped since hitting an all-time high in the spring, and currently trade for 26 times forward earnings estimates.

That's the lowest multiple among the big three public cloud platforms, even though its cloud business is growing faster than the competition's and its Search business continues to generate substantial (and growing) operating income every quarter. What's more, Google's better positioned to produce high returns on its invested capital thanks to the popularity of its TPU chips, which produce faster payback periods than traditional GPU chips.

Overall, Alphabet looks like the best cloud provider to buy right now, with its cloud revenue set to drive earnings much higher over the next few quarters.

Faruqi & Faruqi, LLP Securities Litigation Partner James (Josh) Wilson Encourages Investors Who Suffered Losses In Alphabet To Contact Him Directly To Discuss Their Options

If you purchased or acquired securities in Alphabet between May 19, 2026 and July 16, 2026 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).

[You may also click here for additional information]

New York, New York--(Newsfile Corp. - October 17, 2026) - Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Alphabet Inc. (""Alphabet" or the "Company") (NASDAQ: GOOGL) and reminds investors of the November 30, 2026 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.

Faruqi & Faruqi is a leading national securities law firm with offices in New York, Pennsylvania, California and Georgia. The firm has recovered hundreds of millions of dollars for investors since its founding in 1995. See www.faruqilaw.com.

As detailed below, the complaint alleges that the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) that the Gemini 3.5 Pro was delivering disappointing training results; (2) that, as a result, the launch of Gemini 3.5 Pro would be significantly delayed; and (3) that, as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

On July 16, 2026, Bloomberg reported that 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. On this news, Alphabet's Class A common stock price fell $16.46, or 4.4%, to close at $354.46 per share on July 16, 2026, on unusually heavy trading volume.

The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.

Faruqi & Faruqi, LLP also encourages anyone with information regarding Alphabet's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.

To learn more about the Alphabet class action, go to www.faruqilaw.com/GOOGL or call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).

Follow us for updates on LinkedIn, on X, or on Facebook.

Frequently Asked Questions (FAQ) for Investors Regarding the Alphabet Securities Class Action Lawsuit:

What is the Alphabet securities fraud lawsuit about?

Faruqi & Faruqi, LLP has filed a securities class action lawsuit against Alphabet Inc. (NASDAQ: GOOGL) on behalf of investors who purchased Alphabet securities during the Class Period. The lawsuit alleges that Alphabet and certain of its officers made materially misleading statements or omissions regarding the Company's business, operations, and prospects. Specifically, the complaint alleges that Alphabet's Gemini 3.5 Pro model was delivering disappointing training results and that, as a result, the launch of Gemini 3.5 Pro would be significantly delayed. The lawsuit further alleges that these undisclosed problems were revealed on July 16, 2026, when Bloomberg reported that Google was allegedly months behind schedule in delivering Gemini 3.5 Pro due to ongoing coding efforts, causing Alphabet's Class A common stock to fall $16.46 per share, or approximately 4.4%, on unusually heavy trading volume.

Who may be eligible to participate in the lawsuit?

Investors who purchased or acquired Alphabet Inc. (NASDAQ: GOOGL) Class A common stock between May 19, 2026 and July 16, 2026, inclusive, may be eligible to participate in this securities class action lawsuit. The Class Period begins on May 19, 2026, and ends on July 16, 2026, the date on which the allegedly corrective information was disclosed and the stock price declined sharply. Eligible investors are not required to seek appointment as lead plaintiff in order to participate in the lawsuit or share in any potential recovery. Class members who do not take any action may still be included in the class and bound by any judgment or settlement, subject to the requirements of the applicable court order.

What is a lead plaintiff, and how can I seek appointment?

A lead plaintiff is a court-appointed representative who acts on behalf of all class members in directing the litigation, including making decisions regarding litigation strategy, the selection and oversight of counsel, and the approval of any settlement. Any investor who purchased Alphabet Class A common stock during the Class Period may move the court for appointment as lead plaintiff, but must do so no later than November 30, 2026. The lead plaintiff is typically the class member or group of members with the largest financial interest in the litigation who also satisfies the requirements of Federal Rule of Civil Procedure 23. Importantly, investors are not required to serve as lead plaintiff to share in any recovery that may be obtained; class members who take no action may still be eligible to participate in any settlement or judgment.

Why should investors contact Faruqi & Faruqi, LLP?

Faruqi & Faruqi, LLP has represented investors in securities litigation for decades and has recovered hundreds of millions of dollars for shareholders. Investors who purchased Alphabet securities during the Class Period may contact the firm to discuss their legal rights, potential claims, and the lead plaintiff process at no cost or obligation.

Attorney Advertising. The law firm responsible for this advertisement is Faruqi & Faruqi, LLP (www.faruqilaw.com). Prior results do not guarantee or predict a similar outcome with respect to any future matter. We welcome the opportunity to discuss your particular case. All communications will be treated in a confidential manner.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/319365

Source: Faruqi & Faruqi LLP

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Google's quantum lab just cleared a barrier that has quietly set the ceiling on how powerful a quantum computer can ever get, and the implications reach well beyond a single research paper.

Google Quantum AI published “Magic state cultivation on a superconducting quantum processor” in the journal Science on October 15, 2026. The paper is the first hardware demonstration of a technique that cut errors 40-fold compared with states prepared without it.

Class A shares of Alphabet (NASDAQ:GOOG | GOOG Price Prediction, NASDAQ:GOOGL) rose 0.45% that day to close at $349.22, which valued the company at $4.27 trillion. The small move reflects how a stock this large trades on search, cloud, and AI, and investors treated the paper as good science with a distant return.

A lab result like this changes very little. It strengthens a long-term research effort that Alphabet can fund with its own profits.

What Google Demonstrated on Willow The experiment ran on Google’s Willow processor. It produced T-states, a type of magic state, at 99.99% logical fidelity, which means an error rate of 0.0001 or less.

Google researchers Craig Gidney, Noah Shutty, and Cody Jones developed the method in 2024. It places an imperfect state in a small chip region. It checks the state with measurements, discards failures, and extends the survivors into a larger error-correcting code.

Only 8% of attempts passed the filter. Throwing away most attempts is how the method works, because it gives up volume to get quality.

Alphabet CEO Sundar Pichai reacted on X that day. He wrote: “Some magical progress towards “magic state” in quantum!”

Why Magic States Set the Size of a Quantum Computer Complex quantum calculations need magic states. Each one can be used only once, so the machine has to keep making new ones. Some estimates say up to 95% of a quantum computer’s capacity could go to producing them.

Without a cheap, reliable supply of magic states, a quantum computer can only run calculations an ordinary computer already handles, and making them more cheaply reduces how large a machine you would need to build.

How Much Quantum Is Worth to Alphabet Shareholders Alphabet does not report quantum as its own division. The closest line is Other Bets, which brought in $382 million in the second quarter of fiscal 2026. Total revenue that quarter was $119.8 billion.

Google Cloud brought in $24.77 billion in the same quarter, up 82%, and Cloud is what moves the stock. Google disclosed no revenue, customers, or timeline tied to the quantum result.

The quantum lab is paid for by a business that earned $40.77 billion in operating income in that one quarter. Smaller quantum companies depend on investors staying interested enough to fund them.

There’s still a bottleneck.

Magic states are still a constraint. Cultivation now has to work at a much larger scale, inside a machine running a useful calculation, before it changes what quantum hardware can do.

Other large technology companies and smaller listed quantum firms have their own error-correction plans; Google leads in one technique, and the field is competitive.

What Drives Alphabet’s Valuation From Here Alphabet’s investment case rests on the core business, and quantum is a long-term research effort that shareholders get at no added cost.

The shares are up 11.79% so far in 2026 and 39.48% over the past year. They trade at about 16 times trailing earnings. But that multiple looks cheaper than it really is because second-quarter net income included a $99.03 billion gain on equity securities.

The main risk is spending. Second-quarter capital spending, the money spent on data centers and equipment, reached $44.92 billion, and free cash flow, the cash left after that spending, was negative $5.86 billion. That expansion also feeds a long list of suppliers in power, cooling, and networking (we featured seven of them in a free report on the AI infrastructure trade).

The thing to check is Cloud growth in the third-quarter earnings report. If growth stays near the second quarter’s pace, the case for the stock holds. A sharp slowdown would hurt the stock far more than a quantum paper could help it. On the quantum side, look for a follow-up paper showing cultivation supplying a logical computation at larger scale.

Contact [email protected] for any questions or corrections.

Sergey Brin has been helping to steer Google's AI efforts.

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Google may be approaching a pivotal moment in AI.

In a roundtable discussion about the creation of Google's new Gemini 4 model, Argon, company cofounder Sergey Brin said that AI development was accelerating internally and that models are now helping build their successors.

This concept, known as recursive self-improvement (RSI), means AI helps build better AI systems, which can set off a flywheel that speeds up the pace of building new models.

Brin pointed to the releases of Google's Flash models before Gemini 4 as evidence that this was happening, and said the company was "starting to get onto that RSI treadmill."

"And now our researchers and the model work hand in hand to make the next version of the model," he said during the roundtable, which Google shared on Wednesday.

Anthropic and OpenAI have also said that AI may be on the verge of RSI. A new report from the firm Gladstone AI, published this week, outlines the ways AI companies are moving toward RSI. Most researchers — who work at companies including Anthropic, OpenAI, and DeepMind — interviewed for the report believe RSI will start within the next 3 to 12 months. It could come sooner, they said, assuming there was no government intervention.

In a safety report for its new Argon model, Google said that some components of the AI research and development cycle were getting automated. "AI agents now operate as high-leverage assistants that author a majority of production code and bug fixes, though code changes remain subject to human review before submission," it noted.

RSI was at the heart of warnings from AI researchers last month that humans could lose control of the technology if sufficient guardrails weren't in place.

'The RSI flywheel has reached a new gear' Brin has been increasingly involved in Google's Gemini efforts and has leveraged his power as cofounder to shift resources to projects he deems most effective, Business Insider previously reported. This has included pushing for more focus on RSI.

During the roundtable, Brin said he was excited by the cadence teams were seeing at Google, and that by the time people were watching the video about Argon's release, they would be a couple of models ahead internally.

Business Insider previously reported that Google employees had been testing a superior version of Argon, internally known as Carbon, which some staff had compared to being on par with Anthropic's Opus 5.5 model for coding tasks.

Others at Google appear to share Brin's perspective. In a post on X, Vihan Jain, an RSI leader for Gemini at Google DeepMind, remarked on how embedded the Argon model had become in its own evolution.

"When your post-training demand shifts from asking for raw chips to asking for Argon quota, you know the RSI flywheel has reached a new gear," he wrote.

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Hugh is a senior correspondent at Business Insider where he writes about Google, tech, and wealth. His work has been cited by The New York Times, Bloomberg, Reuters, The Wall Street Journal, and other outlets.Get an alert whenever I publish a story.Got a tip? You can reach him using the secure messaging app Signal (hughlangley.01) or email ([email protected]). We can keep sources anonymous.

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Google's AI spending has pushed free cash flow into negative territory, yet Wall Street sits nearly unanimous in its bullishness. Whether that conviction is justified depends on three things going right at once.

It was a strong quarter for Google (NASDAQ:GOOG | GOOG Price Prediction). Revenue hit $119.80B, up 24.2%, and Google Cloud grew 82% to $24.77B.

Sundar Pichai called it “an amazing quarter”. Even so, shares are up just 12.03% year to date at $347.86, almost exactly where they stood after that report ($348.10). Can Google hit $500 by 2029?

What’s Holding Google Back Right Now The problem is cash. Capex jumped 100% to $44.92B, and free cash flow came in at -$5.86B. The company’s long-term debt rose from $46.5B to $98.2B, and the buyback was suspended in Q2 2026. Net income of $112.11B was also inflated by a $99.03B gain on equity securities, so the market discounts that headline.

That explains why shares sit 13.9% below their 52-week high of $403.96. They are rebounding, up 3.09% in a week and 6.84% in a month. A beta of 1.211 means the moves run a bit wider than the market’s.

Wall Street Sees 20.8% Upside. Our Model Says 26% The consensus target is $420.36, meaning 20.8% upside. Of 62 analysts, 13 rate it a strong buy, 44 a buy, 5 a hold and 0 a sell. The base case is $438.32, or 26.01% upside, with a range from $371.66 to $455.71. Model confidence is 0.7, which is solid without being certain.

The Street seems too conservative. 92% of analysts are bullish, and earnings growth adds 0.03 to our factor. Cloud backlog reached $514 billion, and just over 50% of it should convert to revenue within 24 months.

Here’s What It Takes for Google to Reach $500 Reaching $500 from today’s price of $347.86 would require a gain of 43.7%.

A forward P/E of 22 meaning forward EPS of $15.96. At $500, that works out to a forward P/E of 31x. The base case of $438.32 already meaning 27x, so the bold target needs about 4 more turns of multiple expansion.

That looks achievable. Our adjustment factor of 1.12 is driven by a sector multiplier of 1.08 and a 0.055 analyst-consensus contribution. As TPU system revenue arrives in 2027, forward EPS should rise, and today’s multiple would contract. Barron’s reports that Google Workspace now has AI agents. Pichai also said: “We are now training Gemini 4, and we’ve been very ambitious with it.”

Capex growing faster than revenue would keep free cash flow negative. The flip side is that all that AI spending has to be powered, cooled, and networked by somebody, and we rounded up seven of those non-chipmaker suppliers in a free report.

Where Google Trades Today vs Its Earnings Power At about 22x forward earnings and a PEG of 1.197, Google looks reasonably priced for a company with 12 straight quarters of double-digit revenue growth.

Shares trade between the 52-week low of $240.12 and the high of $403.96. The stock has gained 804.63% over 10 years. Our five-year path puts the stock at $573.02 in October 2029.

$500 Is a Stretch, But Here’s Why It’s Possible Hitting $500 calls for a 43.7% gain. That’s ambitious, but within reach.

Three things need to happen. Cloud backlog has to convert on schedule, Gemini 4 has to keep Google at the frontier, and free cash flow has to turn positive again. A extended capex bout without matching revenue would wreck it. We wouldn’t expect returns like this every year, but we’ve outlined the path for how Google could reach $500 in 2029.

Contact [email protected] for any questions or corrections.

LOS ANGELES, Oct. 14, 2026 (GLOBE NEWSWIRE) -- The Portnoy Law Firm advises Alphabet, Inc., (“Alphabet” or the "Company") (NASDAQ: GOOG) investors of a class action on behalf of investors that bought securities between May 19, 2026 and July 16, 2026, inclusive (the “Class Period”). Alphabet investors have until December 1, 2026 to file a lead plaintiff motion.

Investors are encouraged to contact attorney Lesley F. Portnoy, by phone 310-692-8883 or email: [email protected], to discuss their legal rights, or join the case via https://portnoylaw.com/alphabet-inc. The Portnoy Law Firm can provide a complimentary case evaluation and discuss investors’ options for pursuing claims to recover their losses.

On May 19, 2026, Alphabet hosted its annual Google I/O developer conference. During the conference, the Company’s Chief Executive Officer, Sundar Pichai, announced that Google’s much anticipated latest artificial intelligence offering Gemini 3.5 Pro would launch in June 2026. Then, on July 16, 2026, Bloomberg reported that 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 Class A common stock price fell $16.46 per share, or 4.4%, to close at $354.46 per share on July 16, 2026, while Alphabet’s Class C common stock price fell $16.39 per share, or 4.4%, to close at $353.58 per share.

The Portnoy Law Firm represents investors in pursuing claims caused by corporate wrongdoing. The Firm’s founding partner has recovered over $5.5 billion for aggrieved investors. Attorney advertising. Prior results do not guarantee similar outcomes.

Lesley F. Portnoy, Esq.
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The S&P 500 hit a fresh record high last week, and it's trading at an elevated valuation as investors price in some very high forward expectations for artificial intelligence (AI) companies. As a result, strong corporate earnings are the key to keeping this bull market going, and most technology giants will report their latest quarterly results over the next month.

Google parent Alphabet (GOOG +0.16%)(GOOGL +0.30%) is scheduled to release its operating results for the third quarter (ended Sept. 30) on Oct. 28. Its stock happens to be reasonably valued heading into the report, and here's why I predict it could soar in the weeks and months that follow.

Image source: Alphabet.

Wall Street will be focusing on Google Search and Google Cloud
Alphabet is an incredibly diverse tech conglomerate, but Google Search and Google Cloud are currently its most important businesses. Search accounts for more than half of the company's total revenue, whereas Cloud is the fastest-growing segment.

There were some concerns that AI chatbots would disrupt traditional internet search engines like Google Search, but Alphabet introduced a series of AI features to transform the user experience. AI Overviews, for instance, use text and images to provide AI-generated responses to queries, which appear above the traditional search results. Then there is AI Mode, which opens a chatbot-style interface where users can expand on their original queries by asking additional questions.

During Alphabet's last quarterly conference call, CEO Sundar Pichai said AI Mode had surpassed 1 billion monthly users, and that these new features were driving an increase in Google Search usage overall. This means users are seeing more ads, which is why the platform generated a record $63.3 billion in revenue during the second quarter (ended June 30), up 17% year over year. Investors should look for a fresh update on how AI is improving the search business on Oct. 28.

Google Cloud is also coming off a record second quarter with revenues of $24.8 billion, which represented an accelerated growth rate of 84%. The platform provides its enterprise customers with access to computing capacity from state-of-the-art data centers, and a suite of ready-made foundation models, which are the primary ingredients for developing AI software. As of June 30, Google Cloud had a staggering $514 billion order backlog from customers who were waiting for Alphabet to build more AI infrastructure.

The backlog might be a good predictor of future revenue, so it's one of the main numbers Wall Street analysts will be looking at on Oct. 28. If it increased during the third quarter, it will be a sign that demand for AI computing capacity remains very strong.

Alphabet stock looks attractive heading into Oct. 28
Alphabet's second-quarter earnings soared by 294% year over year to $9.11 per share, mostly because of the Space Exploration Technologies (SPCX -4.21%) initial public offering (IPO) in June. Alphabet invested $900 million in SpaceX through a private placement in 2015, but accounting rules required the company to recognize the fair market value of its position after the IPO, which was over $90 billion as of June 30. Hence, there was a huge one-off increase to Alphabet's earnings, which had nothing to do with its operating performance.

With that out of the way, Wall Street's average estimate (provided by Yahoo! Finance) suggests Alphabet's earnings likely stabilized at around $3.02 per share in the third quarter, representing a more modest year-over-year growth rate of 5%.

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It's disingenuous to value Alphabet based on its trailing-12-month earnings because of the inflated second-quarter result. But looking ahead, Wall Street thinks the company will generate earnings of $14.98 per share during 2027, placing its stock at a forward price-to-earnings (P/E) ratio of 23.4. That represents a slight premium to the Nasdaq-100 index which has a forward P/E of 22.1, but I think it's justified given the incredible AI-related strength in Google Search and Google Cloud.

Alphabet stock has returned around 45% over the past 12 months, but I think the company's third-quarter report will lay the groundwork for the next leg of upside, as long as its operating results show further momentum in the search and cloud businesses.

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Google CEO Sundar Pichai.

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Google says it's back on the AI frontier, and now everyone can put that claim to the test.

The company announced on Tuesday that its new Gemini 4 model, dubbed "Argon," is rolling out to the public and will be available to Gemini app users and developers.

Google is positioning Argon as its new workhorse model, stating that it excels at coding, cybersecurity, and knowledge work in finance and law.

Tulsee Doshi, Gemini product lead at Google DeepMind, called Argon a "powerhouse" model and said it would be the first of a family of new Gemini models rolling out over time.

As is often the case with the most advanced AI models, Argon is available only to paying users. It's rolling out to Pro and Ultra Gemini app subscribers, meaning users will have to pay at least $19.99 per month to access it. Those subscribers will also see Argon in AI Mode while searching on Google. Developers will also need to pay for the new model.

Google first unveiled Argon last month, but it was only available to a set of trusted partners to proactively test it and address cyber vulnerabilities.

The new model arrives amid heated competition between the big AI companies. Meta said on Monday that its new Muse Wonder class of models would bring the company to the frontier, the industry term for the most advanced AI, while also powering its buzzy personal agent, Muse. Last month, OpenAI started rolling out its latest family of frontier models, GPT-6.

Argon gives Google an opportunity to reassert itself in the AI race after the company chose not to launch its previously-promised frontier model, Gemini 3.5 Pro.

Cornhole-playing robotGoogle has been testing its new Gemini 4 model internally with employees for several weeks and said it had helped engineers increase the production of AI-generated code by 35%, while helping improve other Google products such as Chrome.

"I actually think it's been one of the biggest game changers for us," Doshi told Business Insider, referring to the increased amount of internal testing for Gemini 4. "Getting that feedback from Googlers who are using the model every day, I think has been both helpful in terms of just better understanding the model and better understanding its strengths and weaknesses."

Doshi said Argon was helping to speed up robotics development inside Google, thanks to the model's improved multimodal and reasoning skills. Google said it trained a robot to play cornhole by having Argon watch a human player and calculate joint movements and spatial coordinates.

Google also said it has stepped up efforts to prevent the model from behaving in ways it shouldn't, employing a system that tracks the model's chain of thought to determine if it's behaving. "I think that's actually really important because then you can actually intervene. You can say, 'Okay, the model is actually veering off in a way that's concerning. Let's stop here,'" said Doshi.

"I think that gives us a much more robust set of protections in launching this model."

While Google employees are already testing better versions of Argon internally, Doshi said the model rolling out will be the one the company announced benchmarks for last month. However, Google is making clear that this is just the start of its next big push.

"People should expect to see continued improvements coming from us wholesale," Doshi said.

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Hugh is a senior correspondent at Business Insider where he writes about Google, tech, and wealth. His work has been cited by The New York Times, Bloomberg, Reuters, The Wall Street Journal, and other outlets.Get an alert whenever I publish a story.Got a tip? You can reach him using the secure messaging app Signal (hughlangley.01) or email ([email protected]). We can keep sources anonymous.

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, /PRNewswire/ -- Shareholder rights law firm Robbins LLP reminds investors that a class action was filed on behalf of persons or entities who purchased or otherwise acquired Alphabet Inc. (NASDAQ: GOOG/GOOGL) securities between May 19, 2026 and July 16, 2026, inclusive (the "Class Period"). Alphabet offers various products and platforms in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America.

The complaint alleges that Alphabet misled investors regarding the timely launch of Gemini 3.5 Pro.

Investors who suffered significant losses during the Class Period should contact Robbins LLP for information before the November 30, 2026 lead plaintiff deadline.

Why Was Alphabet Sued?

According to the complaint, on May 19, 2026, Alphabet hosted its annual Google I/O developer conference. During the conference, the Company's Chief Executive Officer, Sundar Pichai, announced its much-anticipated latest artificial intelligence offering Gemini 3.5 Pro would launch in June 2026.

Plaintiff alleges that during the Class Period, defendants failed to disclose to investors that the Gemini 3.5 Pro was delivering disappointing training results, and that, as a result, the launch of Gemini 3.5 Pro would be significantly delayed.

Why Did Alphabet Stock Drop?

On July 16, 2026, at approximately 2:00 PM EST, Bloomberg reported that 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 Class A common stock price fell $16.46, or 4.4%, to close at $354.46 per share on July 16, 2026, on unusually heavy trading volume. Alphabet's Class C common stock price fell $16.39, or 4.4%, to close at $353.58 per share on July 16, 2026.

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What Can Shareholders Do Now?

Investors who purchased Alphabet Inc. during the Class Period may be eligible to serve as lead plaintiff. The lead plaintiff is a court-appointed investor who represents the interests of all class members throughout the litigation. Stockholders who wish to lead the class action should contact Robbins LLP for information before the November 30, 2026 lead plaintiff deadline.

Serving as lead plaintiff is not required to share in any potential recovery. Investors who do not seek appointment may remain absent class members.

Does It Cost Anything to Participate?

No. Robbins LLP represents investors on a contingency fee basis.

Contact Robbins LLP

Investors seeking additional information about the Alphabet Inc. securities class action may contact Robbins LLP by submitting an inquiry, emailing attorney Aaron Dumas, Jr., or calling (800) 350-6003.

Why Robbins LLP

A recognized leader in shareholder rights litigation, Robbins LLP represents investors in securities fraud and shareholder derivative litigation. We have helped restore more than $2 billion in value to shareholders and secured some of the largest recoveries in shareholder derivative litigation history. 

"Companies have an obligation to provide investors with complete and accurate information so that markets can function fairly and efficiently," said Brian J. Robbins, Founding Partner of Robbins LLP.

To be notified if a class action against Alphabet Inc. settles or to receive free alerts when corporate executives engage in wrongdoing, sign up for Stock Watch today.

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Alphabet and Google CEO Sundar Pichai Bloomberg/Getty Images As Google prepares to roll out its new Gemini 4 'Argon' model to the public, staff inside the company are testing better versions that may further close the gap with rivals.

Most recently, employees have been trying a new version of Gemini 4 internally named Carbon, according to documents and screenshots seen by Business Insider.

The model — possibly a new update to Argon, also known as a "checkpoint" — was made available inside Google's internal coding platform, Jetski, in recent days.

One employee told Business Insider that Carbon "feels like Opus 5.5" for coding, referring to Anthropic's most powerful model for long-term agentic coding. However, they caveated that they would need to test it more.

Google's internal testing shows how the company is moving fast with its new generation of Gemini 4 models, which it announced in late September. It also underscores how Google is competing in the fast-moving race for AI coding agents. Anthropic and OpenAI have pulled ahead among developers with models built for complex engineering work.

What are the real-life consequences of AI?

Early versions of Argon tested internally were generally well received by staff, according to conversations with employees and internal message threads seen by Business Insider.

However, one employee said early versions of Argon felt behind on some coding tasks, comparing the model to Claude Opus 5, an older Anthropic release.

The latest updates might close that gap, but Google is not guaranteed to release them. An internal document shows that Google has tested a series of Gemini 4 models, internally named Argon, Barium, and Carbon.

Google's internal codenames are typically out of sync with their public names. For example, one document noted that the internal "Barium-B" model was chosen to be the model that will be known publicly as Argon. It could not be determined whether Carbon will be another update under the Argon name or a different model in the Gemini 4 family.

Google declined to comment.

Argon, Barium, Carbon…Staff have been discussing the new updates in messaging channels seen by Business Insider.

"Feels comparable to Opus 5.5," said one employee, referring to the latest update. "Carbon is really good!" another wrote.

"New Gemini pro next model feels kinda nice," another person posted, referring to the "Next" label that is typically given to new Gemini updates internally.

Google said last month that Argon delivered frontier performance on some coding and knowledge work benchmarks, including domains such as legal and finance.

The company also said Argon had a strong focus on defensive cybersecurity. It said it would first make the model available to partners in its Fairwind Program, an initiative for testing cyber vulnerabilities in new models, before a wider public rollout.

Google is under pressure to show it can still compete on the frontier in terms of model capabilities. The company announced this week a new "universal" Gemini AI agent designed for the workplace, as the battle over agentic assistants among top AI companies heats up.

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Hugh is a senior correspondent at Business Insider where he writes about Google, tech, and wealth. His work has been cited by The New York Times, Bloomberg, Reuters, The Wall Street Journal, and other outlets.Get an alert whenever I publish a story.Got a tip? You can reach him using the secure messaging app Signal (hughlangley.01) or email ([email protected]). We can keep sources anonymous.

Google Alphabet AI More Exclusive Artificial Intelligence Big Tech Generative AI Anthropic

SummaryAlphabet faces a pivotal tension: Gemini AI could disrupt its core search ad business, yet also drive future growth.GOOGL posts accelerating top-line growth—four quarters of 16–24% sales increases—while reported earnings are distorted by large unrealized investment gains.Despite strong long-term outperformance, GOOGL has underperformed the market year-to-date, with technicals signaling recent selling pressure and momentum weakness.Analysts maintain a Strong Buy consensus and $429.36 average target, but valuation views diverge widely, reflecting uncertainty around AI monetization and capital intensity.This idea was discussed in more depth with members of my private investing community, Best Stocks Now! Premium. Learn More » Getty Images

Alphabet, Inc. (GOOGL) (GOOG) (Google's parent company) earns a substantial portion of its revenue from search advertising—ads shown when someone types a question into a search box. The company's most important AI product, Gemini, answers questions directly, which may

24.41K Followers

Analyst’s Disclosure: I/we have a beneficial long position in the shares of GOOGL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Investment Risk and Valuation Disclosure: The information presented is for educational and informational purposes and reflects the author's opinions and analysis as of the date of publication. It should not be construed as personalized investment advice or a recommendation to purchase or sell any particular security. Any price targets, projected returns, or valuation estimates are based on assumptions regarding future earnings, growth rates, valuation multiples, and market conditions. Actual results may differ materially from these estimates, and investors may experience a loss of principal. Historical performance, proprietary grades, and rankings do not guarantee future investment results. Securities discussed may not be appropriate for all investors. Investors should consider their individual financial circumstances, investment objectives, and risk tolerance before making investment decisions

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NEW YORK, Oct. 08, 2026 (GLOBE NEWSWIRE) -- Bronstein, Gewirtz & Grossman, LLC, a nationally recognized investor-rights law firm, announces that a class action lawsuit has been filed against Alphabet Inc. (NASDAQ: GOOG) and certain of its officers.

This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired Alphabet securities between May 19, 2026 and July 16, 2026, both dates inclusive (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: bgandg.com/cases/alphabet-inc-goog-class_action_lawsuit.

Alphabet Case Details

The complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that:

Gemini 3.5 Pro was delivering disappointing training results;as a result, the launch of Gemini 3.5 Pro would be significantly delayed; andas a result of the foregoing, Defendants’ positive statements about Alphabet’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
What's Next for Alphabet Investors?

A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm’s site: bgandg.com/cases/alphabet-inc-goog-class_action_lawsuit. or you may contact Peretz Bronstein, Esq. or his Client Relations Manager, Nathan Miller, of Bronstein, Gewirtz & Grossman, LLC at 917-590-0911. If you suffered a loss in Alphabet you have until December 1, 2026, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as lead plaintiff.

No Cost to Alphabet Investors

We, Bronstein, Gewirtz & Grossman LLC, represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys’ fees, usually a percentage of the total recovery, only if we are successful.

Why Bronstein, Gewirtz & Grossman, LLC for Alphabet Securities Class Action?

Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide. More at www.bgandg.com

"Our practice centers on restoring investor capital and ensuring corporate accountability, which serves to uphold the essential integrity of the marketplace," said Peretz Bronstein, Founding Partner of Bronstein, Gewirtz & Grossman, LLC.

Follow us for updates on LinkedIn, X, Facebook, or Instagram.

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Peretz Bronstein, Esq. or Nathan Miller
Bronstein, Gewirtz & Grossman, LLC
917-590-0911 | [email protected]

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While most people know Google parent Alphabet (GOOG -0.02%)(GOOGL -0.04%) is a key player in the artificial intelligence industry, most investors also know that search-based advertising -- via Google -- remains its bread-and-butter business.

Still, it's tough to ignore the fact that Google Cloud's sales are soaring. They rose 82% year over year to $24.8 billion during the second quarter, and plenty more cloud revenue is already lined up. CEO Sundar Pichai said during the Q2 conference call that Google Cloud's backlog of future business stood at $514 billion.

Is it time to rethink what Alphabet is? Not quite. But it wouldn't be wrong to put the possibility on your longer-term radar.

Google CEO Sundar Pichai. Image source: Alphabet.

If nothing else, faster growth The graphics below tell the tale. Search advertising is by far still the company's single-biggest source of revenue, accounting for more than half of Q2's total top line of $119.8 billion (and more than two-thirds of the quarter's sales when counting YouTube and its ad business within Google's broader network). Cloud computing, conversely, accounted for roughly one-fifth of Alphabet's total revenue. But it's undeniable that cloud computing is the company's fastest-growing arm.

Data source: Alphabet. Chart by author.

Cloud computing -- where the company reports most of its artificial intelligence-related results -- is also growing its profitability at an even faster clip. While last quarter's cloud operating income of $8.8 billion was only slightly less than 22% of the company's total operating income of just under $40.8 billion, it was also up more than 200% from cloud-based operating income of $2.8 billion reported for the second quarter of 2025.

Data source: Alphabet. Chart by author. Note that the "other bets" and "corporate" segments, both of which routinely report operating losses, are excluded.

Moreover, another $514 billion worth of future cloud computing revenue has already been lined up. At its current pace, that's more than five years' worth of cloud sales just waiting to be booked.

Yes and no, but not the point either way So in answer to the question, cloud still isn't anywhere near the profit center to Alphabet that Google search and its related/branded services are. However, cloud computing will likely account for a slight majority of the company's operating income growth for the foreseeable future.

Google Services' operating income improved by $6.5 billion year over year in Q2, for perspective, while Google Cloud's grew by $6 billion. With its cloud arm now operating at scale and its profit margins widening at a brisk pace, continued strength in artificial intelligence promises a major positive impact on net profit growth from here.

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Just don't get so enamored by the specific numbers that you lose sight of the bigger picture. That is, Alphabet remains an incredible growth stock precisely because it's a leading name on multiple fronts. And it would be a promising investment even if its AI-led cloud business wasn't making quite as big an impact on its top- and bottom-line growth.