BlockBeats News, July 22nd, according to Bloomberg, Alphabet is set to report its second-quarter earnings after the U.S. market closes on Wednesday. Investors will be closely watching whether the growth of Google Cloud can prove that its massive AI investment is paying off. The market expects Alphabet's revenue and net profit to increase by about 25% year-on-year, with Google Cloud revenue expected to grow by nearly 65% to $22.4 billion, compared to a 63% increase in the first quarter.

Alphabet previously projected that its capital expenditures could reach as high as $190 billion in 2026, and indicated that spending in 2027 would increase significantly. Analysts surveyed by Bloomberg's consensus forecast suggest that its 2027 capital expenditure could rise to $262 billion, nearly three times the level in 2025. Therefore, investors are hoping for a continued acceleration in the cloud business to confirm that the expanding AI infrastructure investment is yielding returns.

Alphabet's stock price has risen by about 11% since 2026, but has fallen 14% from its all-time high in May. Jonathan Cofsky, an investment manager at Janus Henderson, said that if the cloud business continues to grow rapidly and the search business remains strong, it will help alleviate concerns in the market about the scale of spending and overall investment returns.

Alphabet currently has a forward 12-month P/E ratio of about 23 times, higher than its 10-year average of 21 times, and on par with the Nasdaq 100 index. Evercore ISI analyst Mark Mahaney believes that considering the continued strong demand for AI infrastructure, there may still be significant upside to Google Cloud revenue forecasts.