{"id":115101,"date":"2026-07-22T16:23:11","date_gmt":"2026-07-22T16:23:11","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/115101\/"},"modified":"2026-07-22T16:23:11","modified_gmt":"2026-07-22T16:23:11","slug":"googles-profits-are-outrunning-its-ai-spending-boom-alphacheck-2","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/115101\/","title":{"rendered":"Google’s profits are outrunning its AI spending boom: AlphaCheck"},"content":{"rendered":"\n

Alphabet’s (GOOGL<\/a>) AI spending has surged. So have sales and profits. <\/p>\n

Earnings after the bell<\/a> will show whether that unlikely combination can hold. <\/p>\n

So far, Alphabet has made the balancing act look almost easy. <\/p>\n

Its operating margin<\/a> \u2014 the share of sales left after running the business \u2014 reached 36.1% in the first quarter, its highest level in five years. Revenue grew 22%, while operating income jumped 30%. <\/p>\n

\"AI<\/a> Yahoo Finance AlphaSpace <\/p>\n

Growth has helped do the heavy lifting. <\/p>\n

Google Cloud revenue surged 63%<\/a> last quarter to more than $20 billion, while Search revenue rose 19%. Cloud operating income tripled, giving Alphabet a rapidly expanding profit engine alongside its advertising business. <\/p>\n

\"Faster<\/a> Yahoo Finance AlphaSpace <\/p>\n

Now the bill is getting much bigger. <\/p>\n

Alphabet spent $35.7 billion last quarter on servers, data centers, and other infrastructure and equipment. Wall Street expects quarterly capital expenditures, or capex<\/a>, to approach $44 billion in Wednesday’s report, while the company plans to spend as much as $190 billion for the full year. <\/p>\n

It has already warned that 2027 spending will be “significantly” higher. <\/p>\n

\"Alphabet<\/a> Yahoo Finance AlphaSpace <\/p>\n

The cash goes out immediately, but the hit to profits arrives over time. <\/p>\n

Once new servers and data centers enter service, Alphabet gradually records their cost through depreciation<\/a>. Alphabet generally spreads the cost of servers and network equipment across six years<\/a>, meaning today’s spending can weigh on profits well into the future. <\/p>\n

That delayed bill is already growing. Alphabet said depreciation would accelerate this year as earlier investments entered service, adding to energy and other data center costs. <\/p>\n

Wall Street expects Alphabet’s operating margin to ease to 34.7% this quarter as spending approaches $44 billion. <\/p>\n

Holding margins near 35% while sales keep growing around 20% would show Alphabet is still outrunning its AI bill. A much weaker margin as spending climbs would show the bill is catching up. <\/p>\n

Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared<\/a> or email him at jaredblikre@yahooinc.com. <\/p>\n

Click here for in-depth analysis of the latest stock market news and events moving stock prices<\/a> <\/p>\n

Read the latest financial and business news from Yahoo Finance<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"Alphabet’s (GOOGL) AI spending has surged. So have sales and profits. Earnings after the bell will show whether…\n","protected":false},"author":2,"featured_media":115094,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[24,1483,39,132,1429,8336,13959],"class_list":["post-115101","post","type-post","status-publish","format-standard","has-post-thumbnail","category-google","tag-ai","tag-alphabet","tag-data-centers","tag-google","tag-google-ai","tag-operating-margin","tag-spending"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/115101","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=115101"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/115101\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/115094"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=115101"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=115101"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=115101"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}