Alphabet Announces Second Quarter 2026 Results [pdf]

Short version as far as I can see:

30% up year-over-year, driven by growth in both Google services and Google cloud.

priced in

Overview blog post: https://blog.google/company-news/inside-google/message-ceo/a...

Down $13+ (about 4%) after hours, and the drop was apparently after they mentioned the search revenue miss on the earnings call because it was flat when I looked an hour ago. So not entirely priced in.

IIRC there was a search revenue miss last quarter too. Likely because of AI cannibalization of search results. Classic search is very heavily monetized, and a monopoly ad market. AI mode is currently lightly monetized, and a much more segmented market, and one that is harder to target ads for. Plus there are easily half a dozen LLM vendors now, while Search was a clear monopoly.

This is something investors should be very concerned about. It's not at all clear that whatever comes post-Gemini will be nearly as profitable as Search has been for the last 20 years.

>>$98B in unrealized gains on equity securities

Now the question is how are those equity securities valued. If for example they value their Anthropic stake based on the latest funding round then it's not very reliable (it's not clear if they can ever realize that gain or if the gain doesn't turn into a loss).