Cloud backlog hit $514B, up 24% from Q1. CapEx guidance widened to $195B-$205B for 2026. CFO said third-party compute serves as a bridge while internal data centers come online.
Alphabet (GOOGL) reported Q2 2026 revenue of $97.4 billion, up 24% from a year earlier, driven by Cloud revenue growth of 82% to $15.2 billion. Cloud backlog reached $514 billion, up from $412 billion at the end of Q1.
CapEx for the quarter came in at $22.4 billion, slightly below the $23.2 billion analysts had projected. The company guided full-year 2026 CapEx to a range of $195 billion to $205 billion, up from the $180 billion-$200 billion range it gave three months ago. The lower end of the range rose by $15 billion, while the upper end held steady.
Chief Financial Officer Anat Ashkenazi told analysts on the call that the company is expanding third-party compute capacity as a bridge while Alphabet works to bring its own data centers online. The approach lets the company scale AI workloads faster than internal construction alone would allow, she said.
Google Services revenue rose 12% to $69.8 billion, while YouTube ad revenue grew 18% to $10.1 billion. Other Bets, which includes Waymo and Verily, posted $1.2 billion in revenue against a $2.1 billion operating loss.
Operating income rose 38% to $35.1 billion, with operating margin expanding to 36% from 32% a year ago. The company reported net income of $28.6 billion, or $2.28 per share.
The wider CapEx range suggests Alphabet is still calibrating how much it needs to spend on AI infrastructure. The $514 billion cloud backlog – which represents signed contracts not yet recognized as revenue – gives the company visibility into demand that few peers can match, though converting that backlog depends on ramping compute capacity fast enough.
Alphabet's Alpha Score is 71 out of 100, a Moderate rating, with the stock trading at $342.09, down 1.46% on the session.
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