Alphabet reported second-quarter 2026 revenue that exceeded Wall Street forecasts, propelled by an 82% surge in Google Cloud sales and a 13% increase in YouTube advertising revenue.
Cloud and AI infrastructure drive growth
Google Cloud revenue reached $24.77 billion for the quarter, surpassing analyst expectations of $24.56 billion and rising from $13.6 billion a year earlier. Overall advertising revenue also beat estimates, coming in at $81.63 billion.
CEO Sundar Pichai said nearly 90% of Fortune 100 companies are now using Gemini Enterprise, and he highlighted strong demand for Google’s security products. “Q2 was an amazing quarter, with Alphabet revenues growing 24% year over year and Google Cloud revenues accelerating to 82% growth, driven by demand for AI infrastructure and AI solutions,” Pichai said. “We have exciting momentum across the board.”
YouTube advertising and music subscriber gains
YouTube generated more than $11 billion in advertising revenue between April and June, a 13% year-on-year increase. Pichai attributed part of the lift to heightened interest around the 2026 FIFA World Cup, which drew over 1.7 billion unique viewers to related videos. YouTube Music also recorded continued subscriber growth, though detailed figures for the first half of 2026 have not been released.
AI model development and investor concerns
Despite the strong results, Alphabet continues to face investor scrutiny over the high cost of building AI infrastructure, as technology firms invest heavily in data centres and specialised chips. The company is also under pressure to maintain its position in the competitive AI market. Google delayed its Gemini 3.5 Pro model over concerns about its performance relative to rival systems, a claim the company has rejected.
“We’re shipping quickly across a wide range of models while keeping them highly cost-effective for customers,” a Google spokesperson said. “We’re currently testing 3.5 Pro, an upgraded Flash model, and other models with partners, and we’re productively engaged with the U.S. government.”
Share performance
Alphabet shares have risen about 4% over the past three months, outperforming some technology peers, though they remain below their prior 52-week high.
