"Alphabet's ( Nasdaq:GOOGL) world-class growth engine will be tested again when it reports third-quarter fiscal 2025 results after the close today. CEO Sundar Pichai called Q2 "a standout quarter" as every major business , Search, YouTube, Cloud, and subscriptions, delivered double-digit growth. The company also raised full-year CapEx guidance to $85 billion, reflecting escalating investment in AI infrastructure. Investors will now look for proof that these billions are translating into sustained monetization rather than simply higher depreciation."
"AI-Driven Search Evolution- Pichai said in Q2 that "AI Mode has launched in the U.S. and India and is going well,0- with AI Overviews now topping 2 billion monthly users. Analysts will watch whether these features deepen engagement and sustain click-through monetization despite smaller ad surfaces. Google Cloud Momentum- Cloud revenue surged 32% YoY in Q2 with operating margin expanding to 20.7% and backlog reaching $106 billion. Management expects tight capacity through 2026, making utilization and pricing key metrics for future earnings power."
Alphabet reports third-quarter fiscal 2025 results after the close, following a Q2 with double-digit growth across Search, YouTube, Cloud, and subscriptions. Full-year CapEx was raised to $85 billion, with two-thirds for servers and one-third for data centers, driving accelerated depreciation. Q3 revenue is estimated near $100.14 billion with normalized EPS around $2.26 and FY2025 revenue expected near $395.5 billion. AI-driven Search features and AI Overviews, now topping 2 billion monthly users, and Google Cloud’s robust growth and backlog are key drivers. Focus centers on whether increased CapEx yields sustained monetization and operating leverage.
Read at 24/7 Wall St.
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