Alphabet (NASDAQ:GOOGL) beat Wall Street expectations in its second-quarter earnings, reporting US$96.43bn in revenue and earnings of US$2.31 per share, both ahead of estimates. The company also lifted its 2025 capital expenditure forecast by US$10bn to US$85bn, citing “strong and growing demand” for its cloud services and AI infrastructure.
Revenue grew 14% year-on-year, with Google Cloud up 31% to US$13.62bn and advertising revenue reaching US$71.34bn. YouTube ad revenue also exceeded expectations at US$9.8bn. Alphabet CEO Sundar Pichai highlighted expanding adoption of its AI offerings, with more than 2 billion monthly users now engaging with its AI Overviews search product. The Gemini AI chatbot has also grown to over 450 million monthly users.
The company is accelerating AI-related hiring and recently acquired AI startup Windsurf in a US$2.4bn deal. CFO Anat Ashkenazi said the firm would continue ramping up investment into 2026. Alphabet’s net income rose nearly 20% to US$28.2bn, while its “Other Bets” segment, including Waymo and Verily, posted a US$1.25bn loss.
Meanwhile, Tesla (NASDAQ:TSLA) reported a 16% decline in automotive revenue, with total Q2 revenue falling to US$22.5bn, missing analyst expectations. Adjusted EPS came in at 40 cents, below the 43 cents consensus. Vehicle deliveries dropped 14% year-on-year to 384,000 units, with growing pressure from lower-cost EVs and competitors in China.
Tesla’s net income fell to US$1.17bn from US$1.4bn a year earlier. The company cited regulatory credit declines and supply chain disruptions due to new tariffs. CFO Vaibhav Taneja warned that U.S. vehicle supply may tighten in Q3 due to changes in federal EV incentives.
To compete, Tesla began early builds of a lower-cost model and continues developing its robotaxi service in Austin, though it remains far behind Alphabet’s Waymo. CEO Elon Musk said autonomous ridehailing could reach half the U.S. population by year’s end, “subject to regulatory approvals.”
While Alphabet surges on AI-fuelled growth, Tesla is navigating a challenging transition, from premium EV maker to mass-market disruptor, amid rising geopolitical and competitive headwinds.
