Google’s big bet: Q2 profits up, capex explodes to $85 bn

While revenue has increased 14% YoY, net income has risen by 28%

by e4m Staff
Published: Jul 24, 2025 1:18 PM | 2 min read

Alphabet’s Q2 earnings call was a mic drop moment—at least until the capex bombshell landed. The Google parent beat analyst expectations on both revenue and profit, reported surging ad and cloud growth, and then casually raised its 2025 capital expenditure guidance to a staggering $85 billion.

Revenue for the quarter came in at $84.7 billion, up 14% year-on-year and comfortably ahead of analyst estimates. Net income soared 28% to $23.5 billion, translating to $1.89 per share. The stock initially wobbled in after-hours trading but soon stabilized as the numbers—and Google Cloud’s 28% growth—sank in.

That growth was led by the company’s AI-first push across its cloud services and ad tools. CEO Sundar Pichai noted that demand for generative AI capabilities continues to rise across industries, with major clients like OpenAI now using Google Cloud infrastructure in addition to Microsoft Azure. The AI arms race is no longer hypothetical—it’s here, and Alphabet is spending accordingly.

And that’s where the twist came in. Newly appointed CFO Anat Ashkenazi revealed that Alphabet’s full-year capex is now expected to hit $85 billion, up from the earlier estimate of $70–75 billion. That’s one of the biggest capex hikes in Alphabet’s history, driven by “infrastructure investments to support AI training and inference at scale,” including custom TPUs and global data center expansion.

For advertisers and agencies, the message is clear: Google is laying the groundwork for an AI-centric future, and the tools that emerge from this investment will likely redefine ad planning, targeting, measurement, and automation. Expect sharper YouTube recommendations, faster creative generation tools, and deeper campaign insights powered by its LLMs.

Ad revenue itself remained strong this quarter, clocking in at $64.6 billion, with YouTube ads contributing $9.2 billion. While search continues to be the cash cow, Google’s cloud and AI ecosystem are being positioned as the next growth pillars—and the company is betting billions that they’ll deliver.

As Google doubles down on infrastructure while keeping the ad engine humming, the signal to marketers is unmistakable: the future of advertising won’t just run on data—it’ll be built on AI infrastructure you’ll probably have to buy from Google.