Alphabet Inc Class CAlphabet beat Q2 expectations with strong revenue growth and margin expansion, though free cash flow turned negative due to heavy AI capex.
Alphabet beat second-quarter expectations with revenue rising 24.23% to $119.8 billion, driven by Google Cloud's 82% surge to $24.77 billion, while Meta Platforms missed earnings per share by 14.42% as total costs jumped 55%. Alphabet's operating margin expanded to 34%, and nearly 90% of the Fortune 100 now use Gemini Enterprise. Meta's EPS came in at $6.18 versus the $7.2173 expected, weighed down by $2.40 billion in legal charges and $1.18 billion in severance, causing its operating margin to collapse from 43% to 31%. Both companies saw free cash flow crater amid heavy AI capital expenditure, with Alphabet swinging to negative $5.86 billion and Meta's falling 91.31% to $784 million. Meta guided full-year capex to a range of $130 billion to $145 billion and raised its expense outlook to $165 billion to $169 billion, while Alphabet suspended its buyback after raising roughly $70 billion in combined equity and debt.
Alphabet Inc Class CAlphabet beat Q2 expectations with strong revenue growth and margin expansion, though free cash flow turned negative due to heavy AI capex.
Meta Platforms Inc.Meta missed EPS estimates as costs surged, with legal charges and severance weighing on margins, and guided higher capex and expenses.