TLDR: great results. In my eyes, weāre finally starting to see real profit and revenue generation as a direct result of AI CapEx. Which has been a huge drag on sentiment for Big Tech in 2026. One of the more interesting things from this quarter was seeing Google finally reach negative FCF, something thatās been projected for a while now, and something I wrote a post about not too long ago. But it means Google continues to see real returns from its investments, which we saw this quarter with cloud reaching over 80% growth and overall revenue reaching 24% growth. An unprecedented top-line growth rate for a $400 billion a year revenue business. As for earnings and EPS, Iād rather completely ignore that given the massive distortion from Googleās SpaceX and Anthropic stakes. Plus, inherently Google is already a GAAP profitable business, and earnings doesnāt tell you anything except that in this case. So itās worth not ļæ¼diving into that too hard.ļæ¼ Search revenue specifically also grew 17% YoY, which by itself is a hilarious statistic and means Search is now up ~$75b on a numbers basis, or +44% since ChatGPT destroyed the company back in 2023. Also, just this revenue addition alone, is roughly 3x more than the revenue OpenAI has generated in its entire history, combined. Google also showed around $240 billion worth of cash and equivalents sitting on its balance sheet. ā¦ though aside from this stat being a great headline for a Yahoo Finance article, it means nothing for me as an investor since most will be spent on continued CapEx, etc. ļæ¼ Overall, itās a really interesting time for these companies. The takeaway here should be that Google shared great results, and that investments are leading to real dollars and profit. However, that simply means CapEx spend is only going to accelerate. (Which Google announced again that they are doing, hence why shares are down.) In the near term this means even more negative cash flow, likely more debt, etc., until demand bottoms out. Interestingly enough too, you may remember a couple weeks ago $META decided it was partnering with $AVGO (like Google and $AMZN and $MSFT have already done) to create a more cost sufficient in-house chip to replace and/or substitute $NVDA. And on this exact issue (which is why I brought it up), Google said this quarter that most of its cloud revenue is now being āprimarilyā generated off of their Nvidia in-house alternativeā¦ TPU chips.ļæ¼ One of the core strengths of the Google thesis in general has always been that it was one of the first and only massive vertically integrated AI companies ever. And that holds today as well, but now other companies of similar scale are chasing that ordeal. Most notably Meta. But Iād say Amazon is the more underrated attempter at the moment. I think the real loser long-term is going to be Nvidia. Not overall (theyāll be around for a while), but in very core markets like with Big Tech, which at one point I believe took up about 20% of Nvidiaās total revenue. But I donāt keep up with him though as much, so I donāt know if that holds today. This is more an uneducated guess. Regardless though, YouTube, Gemini, now Gemini + iPhone, Google Cloud becoming the fastest growing and one of the largest Cloud platforms in less than a few years, Search continuing to grow thanks to AI integration and adaptionā¦ Itās hard not to be bullish here. Though I donāt want to be all pump and dumb, because there seems to be no end with the spending. And like Iāve said before, this is something to watch. The strategy at the moment for Google (and Iād be happy to guess most of Big Tech as well once we see their earnings) is to not stop spending (which would be a risk), but to become more efficient with its spending as it grows. Because for Google, the money being invested is already showing relative return, but the cost of investment is only going to rise since more returns gives management more incentive to spend. Itās a bit ironic, but thatās the cycle weāre in. Therefore the company (and most Big Tech companies) are betting on becoming more and more vertically integrated overtime to save costs, so they can make a bigger margin between the returns these investments are giving, and how much the investments are costing. (Broadcom, by the way, is one of only 2 companies in the world that these Big Tech companies are partnering with, for these in-house custom Nvidia-alternate chips. Them, and $MRVL. So it may be worth monitoring these two earnings as they come out as well.) Thanks for reading. Happy investing, folks. Earnings release: https://s206.q4cdn.com/479360582/files/doc_financials/2026/q2/2026q2-alphabet-earnings-release.pdf Cc: @bradleytalksmoney, @solofire
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