Alphabet's higher capex spend is warranted due to top line growth, says CFRA's Angelo Zino

Financial Performance - Alphabet's second quarter earnings beat top and bottom line expectations [1] - YouTube's growth was about 13%, exceeding expectations of high single-digit growth [2] - Cloud growth was 32%, surpassing expectations of approximately 28% [3] - Cloud operating margins increased to 21% from 18% last quarter, reaching a new all-time high [7] Strategic Focus - YouTube and cloud, representing about a quarter of Alphabet's revenue, are key areas of investor focus for diversification away from search [5] - The company anticipates cloud revenue potentially doubling in the next 3 to 4 years [6] - Stability and continued growth in search are still important for Alphabet [6] Capital Expenditure - Alphabet increased its CapEx forecast to $85 billion from $75 billion for 2025 [2] - The increased CapEx spend is warranted by top-line growth [3] - Higher CapEx spending is justified by accelerating growth, improving metrics, and improving ROI in cloud business [10]