Alphabet Inc Class CAlphabet's Q2 revenue rose 24% to $119.8 billion, operating income climbed 30%, and Google Cloud revenue surged 82% with cloud operating margin expanding to 35.6%.
Hyperscale technology companies have reached their most favorable relative valuation since at least 2011, as earnings growth finally overtakes their enormous share of the stock market. Finom Group said the gap between the group's market-cap weight and earnings weight fell to a record-low negative 5.22% on July 24, meaning their share of aggregate earnings now exceeds their market-cap weight. Recent earnings support that interpretation, with Microsoft's fiscal-year revenue increasing 18% to more than $331 billion and operating income rising 21%, while Azure growth accelerated to 43%. Alphabet's second-quarter revenue rose 24% to $119.8 billion, operating income climbed 30%, and Google Cloud revenue surged 82% with cloud operating margin expanding to 35.6% from 20.7%. Amazon Web Services revenue accelerated 37% to $42.2 billion, and companywide operating income increased 43% to $27.5 billion. Investors should now monitor whether cloud growth, operating margins, and backlog conversion remain strong enough to absorb rising depreciation and infrastructure costs, as Alphabet raised 2026 capital-spending guidance to $195 billion to $205 billion and Meta expects $130 billion to $145 billion after quarterly free cash flow collapsed to $784 million.
Alphabet Inc Class CAlphabet's Q2 revenue rose 24% to $119.8 billion, operating income climbed 30%, and Google Cloud revenue surged 82% with cloud operating margin expanding to 35.6%.
Microsoft CorporationMicrosoft's fiscal-year revenue increased 18% to more than $331 billion, operating income rose 21%, and Azure growth accelerated to 43%.
Amazon.com IncAWS revenue accelerated 37% to $42.2 billion, and companywide operating income increased 43% to $27.5 billion.
Meta Platforms Inc.Meta expects $130 billion to $145 billion in 2026 capex after quarterly free cash flow collapsed to $784 million.