TLDR
- Alphabet reports Q2 earnings after the bell Wednesday, with Wall Street expecting EPS of $2.95 on revenue of $116.98 billion
- Google Cloud Platform (GCP) revenue is forecast at $22.4 billion, up 64% year-over-year
- Alphabet stock is up roughly 4% over the last 3 months, outperforming Amazon, Meta, and Microsoft
- Google is reportedly testing a new chip codenamed “Frozen v2” designed to improve Gemini processing efficiency
- Analysts hold a Strong Buy consensus on GOOGL, with an average price target of $267.53
Alphabet heads into Wednesday’s earnings report with expectations running high. Wall Street is watching closely to see how the company is turning its AI spending into real revenue.
The company is expected to post EPS of $2.95 on revenue of $116.98 billion for Q2. That compares to EPS of $2.31 and revenue of $96.4 billion in the same period last year. Revenue excluding traffic acquisition costs is forecast at $101.5 billion.
Google Cloud Platform is a key number to watch. Analysts expect GCP revenue of $22.4 billion, up 64% from $13.6 billion in Q2 2025. Cloud has been one of Alphabet’s strongest growth engines as enterprise customers lean into its AI tools.
Remaining performance obligations — essentially contracts Google still needs to fulfill — are expected to top $488.1 billion. That would be up 351% from Q2 last year, pointing to strong forward demand.
Alphabet stock is up around 4% over the past three months. That puts it ahead of its peer group: Amazon has been roughly flat, while Meta is down nearly 6% and Microsoft is off 5%.
New Chip in the Works
On Monday, Alphabet got an extra lift after The Information reported that Google is developing a new internal chip. Codenamed Frozen v2, the chip would embed parts of the Gemini model directly into the hardware, cutting down on processing time and improving efficiency.
Google hasn’t confirmed specifics, but the report added to positive sentiment heading into earnings.
There’s also been some noise around Gemini 3.5 Pro. Bloomberg reported that Google delayed the model due to concerns about its capabilities relative to rivals. Google pushed back on that, saying it is “currently testing 3.5 Pro, an upgraded Flash model, and other models with partners.”
Analyst Outlook
Analyst sentiment heading into the print is broadly positive. JPMorgan’s Doug Anmuth lifted his price target from $260 to $300, keeping a Buy rating. He pointed to Google’s DOJ trial win on search agreements as removing a key overhang, along with continued strong execution.
KeyBanc’s Justin Patterson also raised his target to $300 from $265, maintaining Buy. The firm sees momentum across Search, Cloud, and Waymo, and argues the stock isn’t overpriced — trading at just a 1.5x forward earnings premium to the S&P 500.
Across 28 analyst Buy ratings and 8 Holds, GOOGL carries a Strong Buy consensus. The average price target sits at $267.53.
Options traders are pricing in a move of around 6.6% in either direction following the report, based on the at-the-money straddle on the $270 strike.
Alphabet has beaten earnings estimates in each of its last 10 quarters. Wednesday’s report drops after the market close.
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