Google will be the first to announce the financial reports of the seven giants. New AI chips and AI investment will become the biggest highlights
Yahei; font-size: 14px;"> Alphabet will release its quarterly financial report after the U.S. stock market closes on Wednesday, July 22, officially kicking off the second-quarter earnings season for the "seven major technology giants" in the U.S. stock market. As the first large-cap technology company to disclose its performance, Alphabet's financial performance will not only set the overall tone of the technology sector, but also affect the overall market trend. In the coming weeks, Microsoft, Meta, , Nvidia will announce financial reports one after another, and the market will respond accordingly Performance serves as an important reference. Artificial intelligence remains Wall Street’s top investment thread. Even if Google's revenue is likely to continue to grow at double digits this quarter, investors will not only focus on revenue data, but also determine whether the company's huge investment in infrastructure can deliver substantial returns on investment. Market expectations for Alphabet’s second-quarter results remain high The two core indicators of revenue and net profit both grew by approximately 24% year-on-year. Whether Google can exceed market expectations depends on the following major business segments and key operating indicators: Artificial Intelligence Related Capital Expenditures Cloud computing has always been one of Google's fastest-growing business segments, and the market expects demand for AI computing infrastructure and enterprise cloud services to continue to be strong. Estimates show that Google Cloud’s second-quarter revenue is expected to surge 67% from US$13.62 billion in the same period last year to US$22.79 billion. At the same time, investors will focus on whether the Gemini large model can empower the search business, open up Google's entire product ecosystem, and improve the overall commercial monetization capabilities. Zacks earnings beat forecast (ESP) signals optimism The most critical basis for the market's bullish view on Google comes from the Zacks Performance Surprise Prediction Model (ESP): data shows that Google has a high probability of exceeding earnings expectations again. Wall Street analysts' latest and most accurate earnings estimate is for earnings per share of $2.93, nearly 2% higher than the Zacks Consensus Estimate of $2.87. Google's earnings have exceeded market expectations for 13 consecutive quarters; in the past four quarters, earnings per share have exceeded expectations by an average of 34.43%. New chip Frozen v2 becomes a short-term stock price catalyst Recently, it was reported that Google is developing a new generation of AI server chips, internally codenamed Frozen v2. This chip can directly embed part of the Gemini model architecture into silicon-based hardware, greatly improving the operating efficiency of large models. Boosted by the news, Alphabet's stock price continued to rise during U.S. stock trading on Monday. In short, Frozen v2 is Google's bold move towards large-model dedicated AI hardware. The goal is to make various AI services based on Gemini faster, lower-cost, and capable of large-scale deployment; however, the cost is a decrease in chip versatility and large-model adaptation flexibility. Huge investment in AI remains the market’s biggest concern Compared with financial report book numbers, investors pay more attention to management’s planning and outlook for future AI capital expenditures. In the past year, Google has significantly increased capital expenditures and raced with Microsoft, Amazon, and Meta to deploy AI infrastructure. As long as revenue and profits maintain steady growth, the market can still accept high investment; but if the return on AI investment shows signs of decline, the company's stock price will be under pressure. On the contrary, if the growth rate of Google Cloud exceeds expectations and the commercialization of Gemini progresses well, it will further consolidate the AI bull market logic that has supported the upward trend of technology stocks since 2026. In the first quarter, Google's capital expenditures surged 107% year-on-year to US$35.7 billion, with most of the funds invested in AI computing infrastructure construction. The company's full-year capital expenditure guideline for fiscal year 2026 ranges from US$175 billion to US$185 billion. The funds will mainly be used to expand data centers, build AI computing clusters, purchase servers and network equipment, and iteratively develop self-developed TPU chips to meet the growing demand for Google Cloud and Gemini large models. Investors will pay close attention to whether the company adjusts its full-year expenditure guidance and management's explanation: whether large investments continue to drive cloud business growth and whether AI monetization efficiency improves. The valuation level is still cost-effective Despite the sharp rise in its stock price over the past year, Alphabet's current valuation is still moderate compared to the other six major technology giants.
The company's forward price-to-earnings ratio is 24 times, close to the average valuation of the S&P 500 Index; at the same time, among the seven technology giants, Google has three major advantages: strong earnings growth, abundant free cash flow, and a solid balance sheet. A moderate valuation means that even if the performance only meets the target or is slightly lower than expected, the downside of the stock price is limited; and if the profit guidance is raised, the stock price still has sufficient room to rise. Among the seven major technology giants in this financial reporting season, except In addition, Google is the first to release its financial report, and its earnings conference call is as important as its financial data. If the second quarter results are outstanding and management expresses a positive attitude, it will boost market confidence and pave the way for subsequent financial reports of Microsoft, Meta, Amazon, and Nvidia; conversely, a conservative or pessimistic business outlook will drag down the market sentiment of the entire technology sector.
The company's forward price-to-earnings ratio is 24 times, close to the average valuation of the S&P 500 Index; at the same time, among the seven technology giants, Google has three major advantages: strong earnings growth, abundant free cash flow, and a solid balance sheet. A moderate valuation means that even if the performance only meets the target or is slightly lower than expected, the downside of the stock price is limited; and if the profit guidance is raised, the stock price still has sufficient room to rise. Among the seven major technology giants in this financial reporting season, except In addition, Google is the first to release its financial report, and its earnings conference call is as important as its financial data. If the second quarter results are outstanding and management expresses a positive attitude, it will boost market confidence and pave the way for subsequent financial reports of Microsoft, Meta, Amazon, and Nvidia; conversely, a conservative or pessimistic business outlook will drag down the market sentiment of the entire technology sector.