Google Parent Alphabet Beats Revenue And Earnings Expectations Ahead Of Antitrust Ruling

Core Insights - Alphabet's Q2 earnings exceeded Wall Street expectations, driven by growth in its cloud and search businesses, amidst an impending antitrust ruling that may require the sale of its Chrome browser [1][5]. Financial Performance - Alphabet reported $96.4 billion in revenue and $2.31 earnings per share (EPS) for Q2, surpassing analyst forecasts of $94 billion and $2.18 EPS [1]. - The revenue reflects a year-over-year increase of 14%, while EPS saw a 22% jump [2]. - Google Cloud generated $13.6 billion in revenue, marking a 32% year-over-year increase, exceeding expectations of 27% growth [2]. - Search revenue reached $54.1 billion, slightly above projections of $54 billion [2]. Market Context - Alphabet's stock performance has been relatively flat for the year, recovering from a decline earlier in the year, and has underperformed compared to other "Magnificent Seven" stocks and the S&P 500 [6]. - Concerns regarding competition in the search engine market have been prevalent among investors [6]. Antitrust Developments - A federal judge's ruling regarding Google's illegal monopoly in search is anticipated next month, with potential implications for the company's operations, including a forced sale of its Chrome browser [5]. - Analysts have mixed expectations for Alphabet's stock due to the uncertainty surrounding the antitrust ruling, with some maintaining a "neutral" rating until more clarity is provided [5]. Industry Innovations - Alphabet has introduced several AI products in Q2, including a partnership for smart glasses and a venture fund for AI startups [6]. - The company is also expanding its self-driving car unit, Waymo, to New York [6].