Awaiting Alphabet (GOOGLE) Q2 2025 Financial Report Amid AI Optimism and Antitrust Shadows

Google’s parent company Alphabet will announce its latest financial report on Wednesday evening. The company is growing thanks to its artificial intelligence (AI) technology, but it also faces legal challenges.
Google’s AI technology is now used by billions of people, and is increasingly important in their products. The company’s revenue is expected to rise, mainly from advertising and cloud services.
However, there are two major problems:

1. AI technology capacity is still limited, despite large investments.
2. Google was found to be in violation of competition rules by the court, and could be heavily penalized.

Alphabet (Google) Q2 2025 Report & Issues Summary

1. Schedule & Key Focuses

• Alphabet (GOOG, GOOGL) will release its Q2 financial report after market close on Wednesday.
• Investor focus: AI performance, ad revenue, and cloud segment.

2. Boost from AI

• Alphabet is leading the way in the AI sector with its Gemini AI model and large network of data centers.
• CEO Sundar Pichai mentioned:
  • Overview AI features are used by 1.5 billion users.
  • AI queries are 2x longer than traditional search.

3. Q2 Financial Performance Projections

• EPS (adjusted): $2.17
• Revenue (ex-TAC): $79.6 billion (up 11.6% YoY)
• Advertising revenue: $69.6 billion (+7.7% YoY)
  • From search: $52.7 billion and YouTube: $9.5 billion
• Google Cloud: $13.1 billion (+26% YoY)
  • Cloud operating profit: $2.2 billion (+91% YoY)

4. Positive Factors According to Analysts

• Growth in ad spend.
• AI driving monetization and productivity.
• Cloud performance is solid and Workspace product prices are increasing.

5. Challenges & Risks

• AI capacity is still limited; demand exceeds computing power.
• Google will spend up to $75 billion this year on AI expansion (internal chips + Nvidia).
• Employee buyout program, in line with employee reductions at other Big Tech (Meta, Amazon, Microsoft).

6. Antitrust threat

• Google found in violation of antitrust law by judge Amit Mehta.
• Potential sanctions:
  • Prohibition of exclusive deals like with Apple (Search default).
  • Possible separation of Chrome unit, which could threaten Google’s core search business.

EARNING PROJECTION PREDICTION

WHAT THE ANALYST STATED