Google Earnings LIVE: Will Alphabet Decide Tomorrow's Market Before SpaceX? | Martyn Lucas Investor

[00:00:15]Time for the Google earnings. Remember Google have a big stake in SpaceX.

[00:00:22]SpaceX is crashing the day before the next launch and I have gone 100% all in all cash all margin all external borrowing and sold everything to buy every single share of SpaceX.

[00:00:42]I am down big today and I'm ready for a major payout. I'm either going to lose it all or I'm going to go to one and a half million to$2 million. I've got uh just about a million dollars all invested all in SpaceX. Tonight we're going to hear about it on the Google earnings. Get ready for the Google earnings. I'm going to break down the business, the intrinsic valuation, the margins, the profit, and then we're going to hear from the CEO, Sundar, and the team at Google. Remember, Google own YouTube. So, this is one for me. I've got a good idea how this business is going because I see the um revenue, the earnings revenue on my channel, and I can see what people are spending, the CPM, it's the advertisers rate, how much they pay to advertise. Let's get ready for a massive night. And then tomorrow night live on this channel with $1 million on the line, we are going to see if the rocket takes off. Will it take off? There's an issue now with the weather. Will it be postponed? Will we have a successful launch? All those answers will come tomorrow. But one hell of a couple of days on the channel. It's stressful. No doubt about it. Going all in with conviction on the day the earnings call starts. This is a big big day. We're going to lose it all or we're going to go to one and a half 2 million bucks. 2 million is definitely on the cards with this. Okay. And so is losing it all. We're all in. But right now we are talking Google. Let's get straight to it. The Google earnings starts. We'll have the numbers in fact in half an hour and then the actual the earnings call itself starts in just under an hour. Get ready for it. Google is dropping at the moment. SpaceX is showing some support now. Where are we going? Short interest is absolutely huge on SpaceX. Everyone and his dog is shorting the market tonight. Anyway, often is a big mistake, but anyway, there you go. Tap the like button. Consider subscribing. Let's talk Google. I'm going to give you all the numbers starting off right now. Here we go. The intrinsic valuation of Google is 28% overvalued. We're we're valuing this at 248. It's expensive.

[00:03:15]The whole market is expensive.

[00:03:19]Talk about expensive.

[00:03:22]Let's scroll down and take a look at the business of Google. 75% solvency. It's not going anywhere. It's not going bust anytime at all. Um profitability 74%.

[00:03:35]It's looking good. But let me bring you all the numbers tonight as we watch the market fall, as we watch SpaceX fall off a cliff. You don't even want to ask how much I'm down today. Well, when you put a million dollars in a stock and it drops 60% from when it IPOs just about, you can imagine how much I'm down. So, Google, tonight, one company is about to answer a question that could decide the direction of the entire stock market.

[00:04:12]Not just its own stock, but the entire market. Everything is on a knife edge.

[00:04:17]We spoke to you this morning all about the carry trade unwind. This is a pivotal moment in history. Whoops. That wasn't supposed to do that, was it?

[00:04:30]Disconnect that.

[00:04:32]That's my phone. Uh with it with its uh I knew I should have turned this off.

[00:04:38]This is the trouble when everything takes control of your stuff. It just all gets a bit crazy. Let me uh turn that off again. What is it called? Airplane and continuity. There we go. Let me turn that off. Right. Shall we carry on? Bit of a drama, won't it? Anyway, the whole market is hanging on Google and then SpaceX tomorrow night. Let's break it down because in the next hour, Google reports on its earnings. We're going to cover it live. And what happens on that call will not stay contained to Google. It won't. If Google says there's problems, the whole market comes down and SpaceX will go down further. This is why I think Google um SpaceX is already down so much. I think it's massively oversold. The shorters are getting all their own way. No one's buying it at the moment. I think they will tonight on the earnings. And my $1 million I've got invested could go very easily go over a million bucks tonight. Anyway, it will ripple through Microsoft. It will ripple through Meta.

[00:05:54]It will ripple through Amazon. And it will ripple through Ripple, XRP, crypto, and it will most certainly smash through SpaceX.

[00:06:06]every single member of the so-called magn magnificent 7. If you own tech stocks, I own a million bucks now of uh SpaceX.

[00:06:18]If you own an index fund, if you have a fund retirement account sitting on the S&P, you need to understand what is about to happen tonight because by the end of this live event, we're going to cover the earnings. You're going to get everything. you are going to know exactly what question Wall Street is really asking from Google as we see Google falling down now and so is uh SpaceX. This is my portfolio down $30,000 today. That's what happens when you go all in. Uh you have to go down to go up.

[00:06:57]We warned everybody that Virgin Galactic would be worse. Do not be in Virgin Galactic. That's even worse today. Um, SpaceX is falling down, but I think it's about to bounce big and when it does, we can turn it into huge, huge profits. But let's keep our eye on Google.

[00:07:17]So, Google, it is not the question you think. Stay with me right the way to the end all the way through the earnings and everything is going to be explained because I am going to lay out the one number buried deep inside this earnings report that could tell you whether the entire AI trade is about to keep running or whether it's about to hit a wall. So let's get into it. Here's why tonight matters so much. so much more than normal earnings call. We've got everything on an INFA this morning. We spoke about the carry trade. We spoke about SpaceX um SpaceX um launch tomorrow. There's so much going on all at once. The Iran war is worsening.

[00:08:04]Inflation is worsening. It's a very tough time to decide to buy SpaceX. A lot of people are questioning me, why have you gone all in on the most riskiest stock there is, SpaceX? Well, because I'm buying with conviction, that's why. It's not easy, but to make life-changing money isn't easy. It's never been easy. So, Alphabet is the first of the mega cap technology companies to report tonight. See, earning season, we're back every day.

[00:08:36]Two, three, four, five, six earnings a day. Everything is happening now. That means Google is not just reporting its own numbers tonight. Google is setting the tone and it will set the tone for everything that matters. Everything that matters tonight will be set with this.

[00:08:56]So get ready for it. It's not going to be uh pretty at all. Um for some reason that needs to change. There you go.

[00:09:05]That's better. I'm not quite sure. Oh, my camera seem to be locked.

[00:09:11]That's better. We fixed it. Did we fix it?

[00:09:16]Oh my gosh, what is going on here?

[00:09:20]This is all a bit weird. The cameras are all doing weird things, but there we go.

[00:09:26]Uh, just have to live with that for a minute. Not to worry about it. Anyway, so I have whatever happens on the call tonight will affect everything. Um, we're going to look for the lens at Google, but we're going to be able to see through everything else.

[00:09:45]Microsoft earnings, Meta's earnings, Amazon's earnings because of all of the enterprise spending. It's all interlin and every other name in that group. If Google beats and the market cheers, you can expect a wave of optimism and that will come into SpaceX because they own SpaceX as well.

[00:10:08]So, it's a big gamble on Google tonight heading into the rest of the big tech earning season. We're going to cover it all. But if Google stumbles or if the market reacts badly, and bearing in mind, we're already down even to a decent quarter, that fear spreads fast.

[00:10:28]This is the first true test of big tech earnings this season, and SpaceX is leading the trend. And as you can see, dramatically going down at the moment.

[00:10:40]What is going to happen? SpaceX is down big, being shorted like you wouldn't believe tonight. It's uh it's a very difficult night for investors. It really, really is. Let me see if I can fix this now. I might be able to fix this. I'm not quite sure why my cameras are all being weird, but uh anyway, what about if I go to this one? Does it change to that one?

[00:11:06]Blime me. What a nightmare this is.

[00:11:09]There we go. I've got control of it again. I went to backup systems. We got redundancies for everything. Just like SpaceX, at least I hope. Anyway, anyway, Wall Street is watching every single word. So am I. And as we watch, it's still falling. SpaceX is gaining momentum now. Very painful night for me indeed. So what exactly is Wall Street expecting tonight? The numbers are big.

[00:11:37]Analysts are forecasting approximately $117 billion in revenue. They are expecting earnings per share of around $2.88.

[00:11:51]That is a big ask. Now on the surface, those are enormous numbers. They are.

[00:11:58]But here is the most part. Here is the part most casual investors miss. When expectations are already this high, simply meeting them is not a win. It isn't at all. Wall Street has already priced in a great quarter. So the real question tonight is not whether Google delivers a good quarter. It is whether Google delivers a quarter that is good enough to justify a stock that has already run up in anticipation of this exact moment. Meeting the number will not be enough. Beating it may not be enough. Tonight is about the size of the beat and more importantly what comes next, the guidance. So we've got 15 minutes before we get the numbers. Then we've got the live earnings call and we're watching Google and we're watching how it translates to SpaceX. Today I decided to sell all of my Coca-Cola.

[00:12:59]Lot of it in profit. I'd already made 120 grand this year. The top lots for a wash. A very very small wash. No money made at all. But the but the um the amount I could make on SpaceX was far greater than leaving the money in Coca-Cola. So I sold it all and I moved everything. 100% into SpaceX. My average now is a is aund and uh I forget what it is now. 126. The IPO was $135.

[00:13:30]Well, so we are we are nicely $9 below the IPO price, which is great, but it's still falling. So, let's start with the engine that still drives the entire company. Search. search advertising. I understand it. I make a living on YouTube and I understand uh how much money Google are earning because I can see what they're paying me. When they're paying me increased ad revenue spend, I know that uh Google is making more money. It's just it's just right in front of me in black and white. Everyone wants to talk about artificial intelligence right now. Everyone wants to talk about Gemini. But despite all of that attention, Google search advertising remains Alphabet's single largest source of revenue and most importantly profit. This is still the core of the business. It is. And here is what investors are really watching for tonight. Has AI powered search made this advertising machine stronger or has it started to weaken it? There has been real concern on Wall Street that AI overviews and AI generated answered could reduce the number of clicks going to advertisers. In fact, we have seen it. YouTubers have been complaining for months. We've all dropped in numbers.

[00:14:58]Every YouTuber has dropped in numbers.

[00:15:01]We've been able to maintain our numbers, but globally numbers are down. YouTube channels have shut down. People aren't making money. Why? Because chat GPT came along and people got the answers without having to watch a video. Remember what Google actually is? YouTube is it's a search engine. People ask it a question.

[00:15:21]It delivers an answer via a video. But the video is, you know, generic. It's is it is it specifically to aimed at you?

[00:15:29]Well, chat GPT, you can talk to it and you can ask it exactly what you want in relationship to you. I mean, you can ask me questions and I'm live and I'll sit here and answer them. And I think that's why we've survived. But many YouTube creators have collapsed, numbers are down. Um, all sorts of stuff is going on. We've managed to continue growing, but it's been tough. It has been a tough time, but the tough get going when the tough gets tough. Makes sense. So, we're still here and we're still growing and we're still beating our our own standards, but it's been very, very difficult going through this period of time.

[00:16:06]So the question is, is Google still making money? Well, a lot of people have stopped broadcasting. A lot of numbers are down. However, those that have stayed live have received more money for those advertisement clicks. So, a Google still making the money. Well, tonight we get to find out from my boss, Google YouTube. Let's find out what it is that would affect and hit the exact revenue engine that funds this entire company.

[00:16:34]And if it does, we're in trouble. If search advertising numbers come in strong tonight, that fear gets pushed aside, at least for now. If they come in weak, that is a five alarm. That is a fire alarm that for the stock no question about it. Let now let's talk about YouTube. Now I know more about YouTube than Google search. Let's talk about that because this platform has already quietly become one of the most important growth stories inside Alphabet. YouTube advertising. YouTube shorts. Now, YouTube shorts have exploded. You've seen me make a lot more. In fact, I have a YouTube short come out every 30 minutes, 24 hours a day on several channels. The clips channel, extra channel, we've got the music channel, and the main channel.

[00:17:29]plus Instagram, Reels, X. I have shorts coming out everywhere every 30 minutes.

[00:17:36]Right now, as I'm sitting here across all my platforms, all my networks, every 30 minutes, a a uh short comes out. But the trouble is with shorts is it doesn't make you any money. It's a lot lot lower revenue. So what Google are hoping what YouTube are hoping is it gets more views because it does because people like short form vertical content and thereby it can bring up the slack even though it earns less it's less valuable you get more views that's why I do so many shorts now you may have remember a time when it was lives and videos and a short now and again now it's more shorts than anything other than live of course anyway so the YouTube shorts premium It is under question right now. Um, subscription revenue, all of it. Now, subscription revenue is up. People are supporting YouTube more than ever. At least the creators like us who are growing, as you know, we're gaining members all the time. And uh, we're doing well on that, but not everybody is. A lot of channels don't have any members at all. Some have a couple. We are growing all the time. In fact, the majority of our audience are in fact members. So that space continues to grow in importance inside the business. A strong YouTube number tonight would send a clear signal that Google's ecosystem is not just surviving in a competitive streaming and social media landscape. It is in fact thriving. We think it is.

[00:19:09]It's switched. It's pivoted. And a lot of uh weak uh YouTubers have given up and they've gone home and it's all packed up. But we have worked harder, gone live more, done more, and uh we've, you know, we've kept it going. Anyway, watch this number closely. The YouTube number tonight will tell you everything because YouTube has become one of the most important underappreciated parts of the entire Alphabet story. Now, here is the segment that many analysts believe could be the single biggest story of the entire report tonight. What am I talking about? Most of you probably know it's the cloud. Google Cloud. A growing number of Wall Street analysts believe cloud is the business to watch above everything. I um can believe that to a degree.

[00:20:03]Uh and watch we should it could be above everything else. And tonight we'll learn all about it. We're watching Google come down. We're starting to see a little bit of buying on SpaceX. I keep showing you SpaceX because I'm 100% all in one stock. I'm all in with margin external borrowing. All in with um with uh goo with SpaceX ready for the launch tomorrow. I've got a million dollar invested in SpaceX. All in, all margin, all external borrowing. sold all my Coca-Cola and I'm 100% in with SpaceX at the moment. So, and of course Google owns SpaceX. So, tomorrow night we're going to cover the earnings call and you're going to see me go to one and a half two million bucks or lose it all.

[00:20:53]It could happen. I mean, I might have to sell for losses. That's never good. Is that likely? Well, it's possible. If the launch gets postponed due to weather, that's likely at the moment. What about if the rocket blows up? That's very unlikely, but it's a rocket. I mean, let's not uh kid ourselves. It's not a It's not a It's not a can of Coke sat on a shelf, is it? Like I used to invest in. It's a very high-risk asset. Hence the high risk, high reward.

[00:21:22]So, why does cloud matter? Why does this matter so much? Because cloud growth has become one of the clearest realworld signals of enterprise AI adoption. This is not consumers experimenting with a chatbot. This is businesses paying real money to run AI workloads at scale. If Google Cloud posts strong growth tonight, that is not just good news for Alphabet. That is good news for the entire thesis that companies are actually spending real budget on artificial intelligence infrastructure.

[00:22:03]So tonight, listen out for Google cloud numbers and it'll also resonate with Nvidia, Microsoft, Apple, the list goes on. You want to hear a good cloud number tonight. I really, really hope we do because if Google bounces tonight, so will SpaceX and then I can sell my top lots. I can clear the margin and I can buy on the way down again if there's a delay or that, you know, something goes wrong with the um with the with with with the uh with the rocket. Anyway, a weak cloud number on the other hand tonight would raise uncomfortable questions about the whole sector across the entire technology sector, not just for Google. And as we go into earning season, that would tell you where we're going. And it won't take much now because of the carry trade. We tal we spoke about it this morning. Everything is on a knife edge. This could be a very very very painful few weeks for everybody. Anyway, that brings us to the heart of tonight's earnings call. The question that every single investor, every analyst, and frankly, every person holding tech stocks in their portfolio wants answered.

[00:23:20]What is that question? Well, is artificial intelligence actually making money? This is a huge, huge ask. Is it making money? Google has poured billions of dollars into Gemini, into AI overviews, into the data centers and chips required to power all of it. For the last two years, the story has been about promise, about potential, about excitement. Tonight is different.

[00:23:51]Tonight is about proof. No more. We want to hear the numbers. Investors do not want another slide deck about the future of AI. They want to see it show up in the revenue line. And we'll know this in about five minutes time. Now Google is plummeting and it's going down faster and it's taking SpaceX down with it. My margin call is going to get closer and closer. It's going to go all the way to the wire. I've put all my money on $1 million now. At least it was. It's It's not worth a million now. It's down a big big big big time. All right. And Google is falling off a cliff. It's starting to go down and it's pulling SpaceX with it.

[00:24:40]Remember, they own SpaceX. If this goes down, everything goes down. The shorters are having a field day at the moment.

[00:24:49]But I don't like the shorters.

[00:24:51]I go deep when insurers show up because insurers live for nothing other than selfishness. They want to destroy businesses, destroy ambition, destroy economies for their own selfish greed. I don't like it. I don't believe in it. I think it's wrong. However, I thank them for it because it allows real investors to get what they want cheaper. Cuz we all know Google is expensive. We all know SpaceX is expensive. When the shorters with their negativity, their moaning, and their stupidness show up, we get busy and we dig we dig deep. Many of the big banks in America have already bought SpaceX at 150, 140. Kathy Wood, uh, Arc Invest was buying at 150 and 145. I'm I started buying at 13 uh 138 139.

[00:25:47]My average now is 126. I've got a better average than most of the institutions.

[00:25:54]We know it's going to go back up and the shorters will lose all their money.

[00:26:01]Unquestionably, unquestionably.

[00:26:04]But while that's going on, it's it's not fun and it's not easy. But remain in the game. Remember, right now, it's about remaining in the game. Can you actually stay in the game? That is what it's this is my live real position. Um I've got nearly a million dollars in in in SpaceX all in this is a live position I'm running right now and you'll see me literally get margin called live on the screen if it happens.

[00:26:33]So they want to see it. We want to see it. Everybody wants to see AI show up for the first time in the profit margin.

[00:26:42]That's a big ask tonight. Are we there yet? If Google cannot show that these AI investments are translating into real financial results, the market is going to start asking a much harder question.

[00:26:55]And that question is coming up in just a moment. So, everyone tap the like button. Have you all done that? Have you all considered subscribing? Let me take a break from this for a moment from Google. We've got two minutes before the numbers are out. I'm going to keep my eye on it and we're going to bring you everything uh live for you and we're going to go over to the live earnings call. Everything's going to happen. Let me share with you my actual position.

[00:27:22]So, here we go. Come out of Google just for a moment. Here we are. This was a million dollars. It's going down very quickly. 658,000 plus I've got another 70,000 in the Roth IRA plus I've got another h 100,000 in the ISA and the Robin UK all in SpaceX right now. It was a million dollars.

[00:27:48]It's coming down very very very quick.

[00:27:51]It's very very quick. If I show you my uh margin position, the margin buffer is now at 34.8%.

[00:28:00]8%. That is the margin buffer. And it just got worse because a few hours ago, Robin Hood rerated SpaceX from 25% maintenance to 30. And remember, they can raise it whenever they want. And if they fear that this is in trouble, they raise it to 50. I will get very, very close to a margin call. No question.

[00:28:27]This isn't something you should follow me doing. This isn't something anyone should follow. I'm not giving financial advice. I'm buying with conviction. I understand what I'm doing. I know the risks involved. I know the benefits as well. And uh it's not an easy game. And I hope I hope that no one is following me thinking, well, Martin has won for four years in a row. He's going to win again. The day would come, the day will come when I don't win. No question about it. Uh 95% of day traders lose. I've not lost once in four years. It's inevitable I'm going to make a mistake. I don't think it's going to be a mistake. I'm buying with confidence, but it could be.

[00:29:07]So, if you are buying at SpaceX or whatever you're buying, please be careful. This is going to be a very, very, very bumpy ride and it is incredibly stressful to be part of it and at the same time broadcast to you while I'm showing you my live position.

[00:29:24]So before we get to that, let's I'm going to give you the the number one point tonight.

[00:29:30]But before we talk about that, let's let's talk about capital spending because this is where things get expensive for Google. Uh 10 seconds to go before we get the numbers. I'm keeping my eye on the numbers. Let me refresh the screen. Uh I'm keeping my eye. It'll pop up in my Bloomberg terminal. Uh, so I'm going to keep my eye on it. At the moment it comes, I will bring it to you. All right. So, let's keep on going. You'll I'll soon as I get it, I'll bring it to you.

[00:30:03]So, this is where things get expensive and really fast and things move really quickly. So, SpaceX is bouncing. Google is bouncing.

[00:30:16]Are we going to hit a million bucks tonight?

[00:30:21]Alphabet continues to pour enormous sums of money into AI chips, into data centers, into raw computing infrastructure. Now, tonight, investors are going to be listening closely for two things. First, does management expect to spend even more going forward?

[00:30:41]And second, are they confident these investments will actually deliver strong returns down the road? This is the tension.

[00:30:50]I'm starting to see numbers come across the wires. I'll bring it to you when it comes when I can. Oh, Google's bouncing.

[00:30:56]You'll see SpaceX bounce off it as well.

[00:30:59]This is the tension sitting underneath every AI stock right now. Spending huge amounts of money is easy to justify when growth is exploding. it becomes a lot harder to justify um if growth starts to slow while the spending keeps climbing. It does. We've got a little bounce now on Google half a percent and so is uh SpaceX, but SpaceX is up after hours. It's all trying to go together. Tonight, we find out which direction that tension is heading. Here is something a lot of casual investors get wrong and it completely change how you interpret tomorrow's headlines. Even if Google beats on both revenue and earnings tonight, that might not make uh that Oh, hang on.

[00:31:51]We're watching the wires are lighting up. Uh makes that might not Oh, there we go. Google is popping. Google is popping. It doesn't We don't have the numbers yet. We could see a massive pump on on SpaceX if it does. Yep. SpaceX is going up in the after hours by 0.1.

[00:32:11]Could be a massive night if these numbers hold. We don't have the numbers.

[00:32:15]We're waiting for the numbers to come across the wire and straight goes down.

[00:32:19]Look, there you go. Make be careful chasing this. This is algorithms now. Uh preparing for the news. The news isn't out yet. We're up and down like a blue ass fly. Look at that. Boom. Boom, boom, boom. Remember I always said set limit orders on earnings. Set limit orders on earnings at 10% down, 10% up. I've spoke about this a lot on the show. Very easy to make money, but you can't do it live.

[00:32:44]You need the limit order locked in.

[00:32:46]Anyway, so get ready is what really matters now is what management's outlook for the rest of the year often has far bigger impact than the share price than the quarterly numbers that has already happened. It's about the guidance and the presentation that they're about to give us. 3 minutes past 3. Um SpaceX is falling again. Down goes Google. Lot of movement here. The market is forward looking. It does not care as much about what already happened 3 months ago. It cares about what is coming next. So if you see headlines tomorrow saying Google beat expectations, do not assume that means the stock goes up. Very often we see it going down. Oh my god, SpaceX is falling $115. Now watch the guidance.

[00:33:33]That is where the real story will be told. And this is exactly why tonight carries weight far beyond just one company. Google Alphabet is one of the largest companies on the planet. It results its results have the power.

[00:33:49]Uh Texas Instruments beats on earnings.

[00:33:53]That's good.

[00:33:55]We got a special guest >> at diesel tipped $1.99 through super chat. Bloody freaking hell. My blood pressure is up arrow emoji.

[00:34:05]>> Yeah, I know you feel mate. My blood pressure is through the roof as well.

[00:34:09]It's very very stressful. Um, Texas Instruments has beat by 20 cents. Uh, revenue beat by 5.46, beat by 220 million. Texas Instruments looking good. That's the first one.

[00:34:22]We'll get it on the wires in a second.

[00:34:25]Um, SpaceX is falling. I've got a million. I had a million dollars in this and it's falling. Uh, people often say, "Don't try and catch a falling knife."

[00:34:33]That is not what Peter Lynch said. Peter Lynch said, "Catch a falling knife carefully." That's what I say. Catch a falling knife carefully. Okay, here we go.

[00:34:49]Its results have the power to move the S&P 500. A strong report tonight could send futures higher and set an optimistic tone for tomorrow's entire trading session. A weak report uh RTX revenue getting some I'm getting I got to wait for the clarification of the news. You get news out and then it gets amended. I don't want to report on anything that is wrong. People are saying Google has beaten on earnings, but I got Bloomberg and I check everything first uh before we start shouting about it. Anyway, um anyway, this is bigger than Alphabet. This is about what tomorrow looks like for anyone with money in the market. So, now let's get to the real question, the one that question underneath every single number we have talked about tonight. Can Google prove that artificial intelligence is generating more value than it is costing? That is it. That is the entire ball game tonight. If Google can show that it's massive AI investments are actually strengthening uh search strengthening, cloud strengthening, YouTube strengthening and advertising profits uh investors are going to reward this stock and probably reward the broader AI trade right along with it. But if Google cannot show that tonight, the market is not just going to question Google's valuation. it is going to start questioning the entire AI investment story across the whole technology sector. Google is down nearly 2% and uh we've got SpaceX now $114 every dollar spent by Microsoft, by Meta, by Amazon, by every company chasing the AI buildout suddenly gets viewed for the much more skeptical lens.

[00:36:29]That is why tonight is not just another earnest call. This may be the single most important big tech report of the entire season. The first domino, the one that tells us whether the AI trade keeps its momentum or whether Wall Street starts asking for the receipts. Watch search advertising for stability. Watch cloud for growth. Watch guidance more than the headline beat. And above all, watch whether management can finally connect the dots between AI spending and AI profits. There it is. That is the story tonight. That is a story that will define the earning season. And that is the story we'll be breaking down tonight. We have got uh the earnings call just a few minutes away. Um and uh we're seeing uh we're seeing Google drop off a cliff. It's bouncing. SpaceX is dropping as well. Let me show you SpaceX right now. In fact, let's go to the broader market and show you everything.

[00:37:28]SEI investments gap a beat uh $166 by 25 that's a revenue of 641.62 beat by 5.27 million banner nongap EPS misses by.26 26 revenue 172 million misses by 2.54.

[00:37:47]Um, Google, here we go. Here are the numbers I can verify now. I need it on the Bloomberg terminal, not just what Robin says. Alphabet gap of 9.11, beats by $622.

[00:38:02]Revenue of 119, beats by 2.8 billion.

[00:38:07]It's a good night. Now, remember what I just said a few moments ago. we get a good beat, doesn't mean the stock goes up. It's gone down. It's gone down. And look at SpaceX going down $114 now. What a steal. This is the intrinsic valuation for SpaceX is $67. I told you that the entire time. You can't buy SpaceX for the intrinsic valuation. It's got to be at least double that, which is $120. We are now oversold. Massively oversold. So, it's a huge buy. I can't buy anymore. I've bought every single thing I can. The shortters are crushing it. There's nothing we can do at the moment. The shortters are trying to destroy the stock. Alphabet Gap EPS. Let me share on the screen. 9.11 beats by six. Way above expectations.

[00:38:59]Revenue of 119.8 billion beats by 2.82 billion. This is great. gap EPS of 9.11 beats by 6.22. Revenue beat Google services increased 15% to 94.5. I told you Google's business was good. I see the ad revenue. Even though many other YouTubers have given up, we kept going and we told you things will be okay. Led by 17% growth in Google search and others, 15% in Google subscriptions. I told you that was up. You can see that by the amount of members that we have um as it's off the charts really. Um and uh what else?

[00:39:44]Uh and devices and 13% up in YouTube ads. That was what I told you. The CPM rate is up. We know Google is doing well. The tech business, the sector is still in play. Why is it selling off?

[00:40:00]It's selling off because now we've got the most volatile volatile stock in the history of the stock market, SpaceX, as a publicly traded company. You're allowing shorters to come in and crush the stock. However, there'll be huge volume at any moment, and when there is, they will get wrecked and my portfolio will go way through $1 million. It's not a matter of fact. It's a not it's not a matter of if, it's a matter of when.

[00:40:29]It's going to happen and I would say on the flight hopefully by tomorrow but if we get a delay that'll be a bit more pain for a bit w bit longer but you don't make any money without putting yourself out there. Google cloud this is the one we spoke about saw a meaningful acceleration in growth ad revenues increase 82%.

[00:40:50]This was the big number I was looking for. This is good for Google. It's good for the tech sector. It's good for SpaceX. Global uh Google Cloud saw a meaningful acceleration in growth as revenues increased 82% to to 24.8 billion led by increases in Google Cloud Platform GCP across enterprise AI solutions and enterprise AI infrastructure as well as core GCP services. 15 minutes to go before the call begins. We're going to do we're going to stream the call for you. It's on YouTube. We're going to bring it all to you. We're going to discuss it, react to it. We're going to see how SpaceX reacts to it. And are we going to go back into the green tonight?

[00:41:38]It's been a hell of a day today. Hell of a day. My biggest gain was yesterday.

[00:41:44]$42,000 up. And now today, I'm down $35,000.

[00:41:50]What a flipping swing that was. I think you can agree that was something else.

[00:41:56]Anyway, Consolidated Alphabet operating income increased 30% and operating margin expanded by 2% points to 34%.

[00:42:07]Now, we're seeing Google, I expect it to turn green. Let me come back to it. And we will see a bounce from SpaceX. It will come after hours. Expect it to come in the early hours of the morning when enterprise money moves into SpaceX. They will. They absolutely will. Let's go through uh our positions as we wait for the call to begin. Here we go. So, I was up 42 grand yesterday, down 38,000 today. Huge. Uh it's not really that bad actually. It's more like about um 19,000. The reason it's 38 is I'm all in with margin. So, I'm amplifying the losses. But that's okay because in a minute I'll be amplifying the gains. I have not sold for losses. I've not sold uh when I'm down. So, I'm not going to sell when I'm down. Unless we have uh a disaster with the with the rocket, then I'm in trouble. No question. But there you go. Virgin Galactic, we warned you tonight, do not buy this today. It'll go down. The big money has walked away from Virgin Galactic for now. It's waiting to reposition. It's all going into SpaceX at the moment. Here we go. Google has turned green. Google has turned green.

[00:43:22]Look at that. Very nice. Um, SpaceX is still falling. Expect a big bounce here.

[00:43:29]We're massively, massively, massively oversold. I'm all in. $1 million.

[00:43:36]All of my money, all of my margin, all of external borrowing, all in one stock.

[00:43:42]Sold all my Google, all my SNP, everything to be all in. there's going to be one a hell of a short squeeze and it will take my portfolio way through a million to one and a half maybe even$2 million.

[00:43:57]Palunteer is down. Uh gold is up today and flat on the after hours. Amazon it was down and the moment um we got the earnings from Google we popped up. This is good for the S&P good for the Mag 7.

[00:44:12]Uh Apple is down. Nphase Energy down. It had a big profit today. People took profits. CocaCola, I sold it here for a wash. I got out, sold it for a wash. Um I decided even if we go up to 85, I can make a lot more money by using that money to buy SpaceX. That's exactly what happens to to to um Coca-Cola. It's why it's staying down. It's used as the piggy bank. J&J defensive up. Chevron Oil up. Tesla going down. Um we're going to see um SpaceX take over Tesla. And with Tesla going down and down and down, that can only be good for SpaceX. Not good for Tesla shareholders, but really great for SpaceX shareholders.

[00:44:58]McDonald's is down. Google is up, as you can see, 2.45.

[00:45:03]Looking tremendous now. Microsoft popped on it as well. Meta popped on it. You can see that's what after hours it liked it. It's setting up for their earnings call. We know they'll do well. Nvidia has gone up on it. This is good. This will put money to SpaceX. People will take profit and buy on it on the way down. Walmart is down. I can't buy it now. I've got no money left. Tillray Brands down. It's worth nothing. Robin Hood down. Sorry, up after hours. I beg you pardon. Vertical Aerospace, the profit was this morning. It's gone. Joby Aviation down. Arch Aviation down.

[00:45:37]Taiwan down. Bitcoin down. Um XRP down.

[00:45:42]We took profits at 115.

[00:45:45]Uh $1.15. We told you we would and we did it. So Ethereum is down. Uh let's go back to the overall portfolio. We're getting a little bounce now on SpaceX.

[00:45:55]Very nice. The S&P is going up. SpaceX is going up. Come on. Let's Let's have it. Let's have the top lots. Let's go all the way to 147. Let's go there.

[00:46:06]Imagine the people that paid 229. Bloody hell. They're down like 55 60%. There are people who pay 229. People are worried about the unlocking. Doesn't exist anymore. It's overpriced. And why when you unlock would you? Um people have badly reported it. Some really idiots on YouTube are saying things like um it dissolves. It dilutes the stock when it unlocks. No, it doesn't. The shares are already there. They just can't sell them. It doesn't dilute the stock at all. It allows people to sell them. some really bad reporting for some people that haven't got a clue what they're talking about. It's not actually dilution. It's that they can sell it.

[00:46:46]Now, why would you sell it? Why would you sell it at 115? That's absolutely mental. There's no one there's no one on the planet who's selling at 115. The intrinsic value, the intrinsic value is uh $67. You're less than double the intrinsic value. Anyone who sells at 115 needs their bloody head red. But then people will, of course, people do all sort of silly things. Anyway, um let's get ready to rock and roll. We've got uh 10 minutes to go. Let's go to live Q&A.

[00:47:18]Live Q&A on the show. And let's bring everybody in to the show. Wow. There's Wow. My god, there's,00 people watching.

[00:47:26]I had no idea we had so many people watching tonight. Could everyone smash the like button? Let's go mental. We've got 10 minutes to go. I've got $1 million on the line with SpaceX. This could be a huge margin call or a huge massive pump tonight. Uh Google did great. Let's get uh let's get 500 likes.

[00:47:48]500 likes in one minute. Let's get ready to go. Uh this is my SpaceX position.

[00:47:55]We're starting to bounce. I put $1 million today. I'm all in on SpaceX.

[00:48:01]100% of my money, all the borrowing, all the margin. Let's go. Everyone tap the like button. We are now 10 minutes to go. Let's get excited. In 5 4 3 2 1 500 likes. Let's go.

[00:48:20]Let's do it.

[00:48:31]Right, we're starting off with 12 likes.

[00:48:33]Let me refresh the screen. It's out of date. We want 500 likes in 1 minute.

[00:48:38]209. Bang. Straight away. Look at that.

[00:48:42]No down likes. 210. 210. Let's go. 210 likes. Let's go. 225. I'm loving it.

[00:48:51]Loving it. Loving it. And here comes the bounce on SpaceX. We put $1 million tonight into SpaceX. one flipping million dollar tonight in SpaceX on the bounce of Google. There is Oric. There's our song. There's our magic hat. We'll get a song in that uh in a minute. Yeah.

[00:49:12]Yeah. Yeah. Yeah. Yeah. We'll we'll replay that one in a minute. We need 500 likes. Let's come back to it. We've got 272.

[00:49:21]Come on. We're We're over halfway. Over halfway. Google reports in just 10 minutes. We're going to cover it live here from the CEO of Sunda, my boss, uh Google's boss, uh, uh, and, uh, and YouTube's boss. But for that, we want 500 likes. 284, 289. Yes. Yes. Yes. Yes.

[00:49:43]Yes. SpaceX is starting to bounce. We are up now half a percent after hours.

[00:49:47]I've got $1 million on the line. All in with margin. 100% margin used. 295.

[00:49:56]We're we're we're over halfway there now. Let's um get 500 likes and then we can go into the call. We've got 9 minutes to go. Welcome. If you've just joined us, do smash the like button and consider subscribing. That would be absolutely great. Now then, tonight you did notice we are we do have some magic um jewels. If you reveal the magic jewels, there's going to be a special reaction. And there's some a really big reaction that you've never even seen yet. All right, so if someone could find the magic little cat again, our XRP DJ, we've got uh your reaction ready to go.

[00:50:36]I couldn't do it because we were playing the song. All right, but you can do it now, though. All right, 312. We need 500. We've got 9 minutes to go. Tap the like button. Get ready, folks. It's going to be a very, very exciting night tonight. Uh 312. Oh, trading uh what is that? Trading intrader. Con Andy.

[00:50:57]Trading intrader. Con Andy. Interesting name. All right. 34 314. We're nearly We're not nearly there. Well, we're over halfway. Let's see. Anyway, let's go through our positions and then see what we got.

[00:51:11]We'll come back to the the likes in a minute. We want 500. So, my portfolio, we were up 42 grand yesterday, down 34,000 today because of SpaceX. We're all in. The S&P has turned green. Good for SpaceX. I warned everyone, you will not get a bounce on Virgin Galactic. It will go down. Myself and eight of the biggest retail investors in the world in Virgin Galactic are out. They're not buying this. They're putting the money into SpaceX. When the big money returns, when we can trim off SpaceX, it will go up. I said to you tonight, it will go down. But it won't bounce with SpaceX.

[00:51:46]And it hasn't. I was right. Okay. SpaceX has bounced though. It not much, but it's just showing some signs. Palunteer down. Gold going up. Amazon is down up after hours. The same exactly the same as SpaceX, funnily enough. Apple is down after hours. Nphase Energy my top pick for $100. Coca-Cola is down. Is down. Is down. This is a good reason why I sold for a wash. I did tell everybody on Discord I am selling uh I had about $350,000 of Coca-Cola. I've made $120 grand this year on Coca-Cola. I said enough is enough. I'm selling for a wash of what I had left and I was right to do it because it's gone gone down cuz tech has gone up. A classic rotation. I put it all in SpaceX. A much bigger return on SpaceX. That's why I did it. Okie dokie.

[00:52:41]So I was right. Okay, J&J going up, Chevron Oil going up, Tesla going down.

[00:52:47]Uh, that's on SpaceX from Imagine they're taking it over. They want to see it go down because they're going to take it over. Google is up6 after hours.

[00:52:56]Microsoft is down, but now coming up after hours. Meta hasn't recovered at all. Nvidia is up. I sold it at 220. I'm not buying it back here. Um, uh, Walmart is now an AI play. How long have we got now? Six minutes to go. We can't start the call until we get 500 likes. We need 500 likes, everybody. Let's go back to the chart and see. We got 326 people. How many watching? 837.

[00:53:27]837. And we've only got uh Oh, that's it really because 50% of you are signed in.

[00:53:33]That's really it. Oh well. Okay. That's really We can't really get any more than that to be honest with you. 50% of people aren't signed in. So 846 is really as as much as we're going to get.

[00:53:45]It's half of that. So 400 would be the max. So I'm happy. I'm happy. There's no point asking for more. You can't get anymore. Everybody who signed in has given you a like. So let's get ready for the call. There's no point even bothering it anymore. Thank you ever so much everybody who got behind the show tonight and supported it. We'll be live of course tomorrow with the Space X launch. Where else are you going to watch it? You can watch it on any other channel that covers SpaceX, but they will not show you their real trades, their real margin position, their real bank account. I will. You can watch a flight, a launch tomorrow night with somebody who actually owns the stock up to a million dollars on the line. You can or you can watch some bros with baseball caps and headphones making it up, telling you what they've got, but they won't show you. I will show and share everything with you. I will ask everyone, answer everyone's question.

[00:54:39]We'll cover the uh we'll cover the live event and you'll see me trade it live and you'll see me win or lose live on the show. That's tomorrow night SpaceX.

[00:54:48]But for now, here we go. This is Google earnings. This is the buildup. They are showing a video as you can see. Uh they're showing a video. There's no point covering this for copyright reasons. There's nothing going on there.

[00:55:02]They'll bring it to us in a minute. When this ends, we will go straight into the Google earnings. It will be in five minutes. So, please stand by. All they're showing right now is the buildup. This is copyright material, so I don't want to play it. I'm just uh going to bring you the live earnings call which starts in four minutes from now. Okay. So, Google is up in the after hours. Uh and uh let's have a look. We are bouncing a lot now. Ooh, we are bouncing a lot now. We are up. Yes, we are bouncing. SpaceX is bouncing hard.

[00:55:43]We're up6 now. Now6 might not sound a lot to you, but when you've got a million dollars in it, it is. All right.

[00:55:52]So 6 of a million dollars is quite a bit. And we are bouncing on the news tonight from from Google. So, this is exactly what I wanted. It was a big risk. It was tough to do it, but it was it had to be done. And there it is. So, we're getting ready for Google. We're just doing the buildup. There's nothing yet to see here. This is all copyright material. We don't want to play that, do we? All right. So, we're bounc.

[00:56:20]This could be a this could be a whole percentage point in a second. And that's a lot of money when you've got a million dollars uh invested. So there you go, Google.

[00:56:30]Are we going to get a margin call or are we going straight to one over well$1.5 or even $2 million? Right, let's have a look. Well, Google, we are now 3 minutes to go before the call. They're on time because we're already there with the buildup. Okay, >> take a second.

[00:56:49]>> There's the audio or we've come.

[00:56:52]>> There's the audio.

[00:56:55]We're climbing quickly now.

[00:56:59]SpaceX is moving. Google is moving.

[00:57:02]We've got three minutes to go. If everyone could tap the like button. If you'd like our newsletter and our Discord, if you want to see our live trades, we have the best Discord server in the world. And I mean that. We've got an awardwinning newsletter, number two in the bestseller Substack. Our owner who sends a talk to Michael Bur. So, that's pretty cool, right? our news, our um our membership awards. We've just received best uh best practice and best value from YouTube, but no no price increase for 5 years. Our Discord is always 90% discount. No AI, no sponsorship, no ads, no bots, one-on-one support, live trading, big whales, small investors, all inside Discord. There is the link. We've got exactly two minutes to go and it's only a couple of bucks just to cover the admin. And I provide the services for free because I essentially make money from investing and doing the job. There's no sponsors here. No one sponsor the channel. The only channel you'll ever see on YouTube with over 100,000 subscribers with the verification tick, which means genuine and authentic with no sponsors at all.

[00:58:10]All right, so here we go. We have got exactly uh one and a half minutes to go.

[00:58:19]Thousand people watching. Let's get ready. My portfolio is bouncing quickly.

[00:58:26]I've got a million dollars into SpaceX for tomorrow night's event.

[00:58:31]Google, here comes the call.

[00:58:36]There's the music. Let me um I'm just going to mute it for you, but I'm going to listen in so I don't miss anything.

[00:58:43]Okay, let me do this now.

[00:58:49]Okay, I'm listening to the music to make sure I don't miss anything. Here comes the Google earnings. Standby. Uh, in one minute they'll they will be on time because Google are always on time.

[00:59:02]They're very good about that.

[00:59:10]Okay, here comes the Google earnings live now. We've got the CEO Sundar from Google YouTube live on the show with us tonight. We're going to present the Google earnings. It starts in 30 seconds. Please stand by. I've got $1 million on the line. I've gone all in 100% one stock, one asset, all my margin, all external borrowing. $1 million on this knowing that it would bounce tonight. And what is that stock?

[00:59:38]It is SpaceX. I am all in. It went down and down and down. Yesterday we were up 50 grand. Today we're down 30 odd grand.

[00:59:47]A swing of 80 grand in a 24-h hour period. But that is how it goes when you invest. All right, let's get ready.

[00:59:55]Bloody, I've got an itchy nose. Sorry about that. Okay, here we go. Google starts any second now. There's nothing to see on the screen other than a blank screen. So, we'll stay right where we are. Live Q&A coming up. All members comments can be shared on the screen.

[01:00:14]SpaceX is bouncing. Google is waiting.

[01:00:19]Here we go.

[01:00:22]Welcome everyone. Thank you for standing by for the Alphabet second quarter 2026 earnings conference call. At this time, all participants are in listenonly mode.

[01:00:32]After the speaker presentation, there will be a question and answer session.

[01:00:37]To ask a question during the session, you will need to press star one on your telephone. I would now like to hand the conference over to your speaker today, Jim Freedelland, head of investor relations. Please go ahead.

[01:00:49]Thank you. Good afternoon everyone and welcome to Alphabet's second quarter 2026 earnings conference call. With us today are Sundar Pachai, Philip Schindler, and Anat Ashkenazi. Now I'll quickly cover the safe harbor. Some of the statements that we make today regarding our business operations and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially. Please refer to our forms 10K and 10Q, including the risk factors. We undertake no obligation to update any forward-looking statement. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP-Paptogap measures is included in today's earnings press release which is distributed and available to the public through our investor relations website located at abc.xyz/investor.

[01:01:46]Our comments will be on year-over-year comparisons unless we state otherwise.

[01:01:50]And now I'll turn the call over to Sundar.

[01:01:54]>> Hi everyone, thanks for joining us. We have exciting momentum. Alphabet revenue grew 24% year-over-year. Our AI investments are redefining what's possible across every part of our business. Our momentum starts with search where people are adopting one seamless search experience across AI overviews and AI mode. We saw 17% revenue growth in search and other and YouTube ads grew 13%.

[01:02:22]Cloud revenue grew 82% powered by strong demand for AI infrastructure and AI solutions and cloud backlog grew to 514 billion.

[01:02:34]It's great to see the wide adoption of Gemini Enterprise with nearly 90% of Fortune 100 using it. Today, I'll expand on our AI progress, our global product footprint led by search and YouTube, Google Cloud's leadership, and our long-term bets. First AI. Yesterday we announced new models Gemini 3.6 flash and 3.5 flashlight which are cost effective and highly efficient. We are seeing tons of demand for our workhorse Gemini flash series because it hits the sweet spot of performance and cost. We also launched Gemini 3.5 flash cyber which I'm really excited about. Paired with our code mender agent, it finds and fixes vulnerabilities and delivers performance at the frontier comparable to far bigger cyber models. Gemini 3.5 Pro is currently in testing and our team is already building the next generation of models. We have started our most ambitious pre-training run yet for Gemini 4 and are excited by the progress we are seeing at the frontier.

[01:03:41]Demand for our models is translating to strong token usage across developers and enterprise customers. And we continue to be supply constraint, a sign of momentum and rapid adoption. More than 9 million developers are building each month with our models across our APIs and key developer products. Our model APIs are now processing approximately 22 billion tokens per minute. That's up from 16 billion just a quarter ago.

[01:04:09]Additionally, this quarter we launched Omni. It allows users to create anything from any input, starting with video.

[01:04:16]Since launching at IO in May, there's been a 40% increase in daily active users creating videos on the Gemini app.

[01:04:23]Our Gemma family of open models, small enough to run on local devices, are hugely popular. These models have been downloaded over 900 million times and our latest Gemma for models have been downloaded over 300 million times since launching in April.

[01:04:39]Our agentic development platform anti-gravity allows anyone to build in the agent first era. It has more than 2.4 million weekly active users.

[01:04:49]Anti-gravity is a powerful tool for users and enterprises and it's completely accurated how we build internally. As just one example, a team in Chrome is now on track to axate delivery by eight times, compressing a 2-year timeline into three months through model-driven refactoring.

[01:05:08]Moving on to our global product footprint, which brings AI to more people than any other company. Starting with search, AI continues to drive an expansionary moment with new experiences resonating with users and driving growth in queries. As a big football fan, I was particularly excited to see search usage hit an all-time high during the World Cup this year. This really highlights how much people turn to Google in moments that matter. We continue to make search more helpful and intuitive. We recently brought together AIO views and AI mode into one seamless search experience that combines our frontier capabilities with the best of the web.

[01:05:47]And we are continuing to incorporate more frontier capabilities into search with agents, personal intelligence, and notebooks. Our AI powered features are driving increased search usage. Since expanding AI mode globally last October, we've surpassed 1 billion monthly active users. And just like AI overviews, AI mode is driving an incremental increase in search queries overall. And we are now sending billions of clicks to websites every week through AI features in search.

[01:06:19]As we serve more of these queries, we've continued to drive efficiencies thanks to our engineering and hardware optimizations.

[01:06:27]This quarter, we reduced the cost of AI mode responses to its lowest level since launch even as we have brought more advanced AI capabilities.

[01:06:37]Philip will also talk more about how we are innovating the ads experience.

[01:06:43]Next, the Gemini app, which now has 950 million monthly active users with daily active users tripling in the last year.

[01:06:51]Users love new agentic features like daily brief and our personalized agent Gemini Spar, which is now available in the US and internationally.

[01:07:00]We've been shipping helpful new features like this at an incredible clip. On to YouTube. Month after month, when a big event happens in the world, the world turns to YouTube. It's been incredible to see that over 1.7 billion unique viewers globally watched World Cup related videos on YouTube during the FIFA World Cup 2026.

[01:07:22]We're also bringing the power of conversational AI directly into the YouTube experience. Ask YouTube uses our Gemini models to let people ask complex questions about individual videos, get quick takeaways, and jump straight to moments in those videos. The early engagement is encouraging. More than 140 million users engaged with the Ask YouTube on the watch page in June 2026, and we are bringing that Ask experience to the wider search experience on YouTube.

[01:07:52]Next Cloud. Our continued momentum is driven by our integrated AI portfolio consisting of chips, models, data, security, and agent platforms, all designed to work together. Gemini continues to be a key driver of growth and is deeply integrated across all of our cloud products, including Gemini Enterprise, data analytics, cyber security, and Google Workspace. We are seeing strong diversified demand across products, customers, geographies, and industries. Our product differentiation is driving expansion in three ways. We are winning new customers, more than doubling our acquisition velocity year-over-year. We are deepening our relationships with existing customers who are expanding their usage and exceeding their commitments by more than 50%. Also an acceleration over last quarter. We are driving growth with partners with transactions on Google Cloud Marketplace growing over seven times year-over-year.

[01:08:52]One of the strongest parts of our growth comes from the rapid adoption of our Gemini enterprise platform. It's differentiated with easy to use tools to build agents and automate processes, connectivity to enterprise systems, cost management and governance tools. In Q2, agent development kit, our framework for building and deploying enterprise AI agents, reached nearly 70 million total downloads. As I said, nearly 90% of Fortune 100 are using Gemini Enterprise.

[01:09:23]We have customers like PepsiCo for AI and analytics solutions, Intel to streamline core processes, HSBC for wealth management, Bell Canada for customer engagement, Macy's for commerce experiences, and Signal Aduna for knowledge management. More broadly, Gemini is transforming how millions of businesses use AI to build custom agents, automate processes, improve cyber security, manage customer relationships, streamline data analytics, collaborate effectively, and more. All of this momentum is driving growth in our paid token usage. Nearly 500 cloud customers have each processed more than 1 trillion tokens in the last year, and usage is so much deeper than that. Over the last 12 months, more than 2,000 enterprises consumed over 100 billion tokens. We're also seeing strong interest in our AI powered security platform, which is differentiated because it integrates threat intelligence, cyber response prioritization with best AI automated scanning, code remediation, and monitoring.

[01:10:31]Today, 90% of Fortune 100 are Google Cloud security users. Nearly 90% of VIS customers are using AI powered security features and we have seen a more than 45% quarter-over-quarter increase in the number of AI workloads scanned and protected by our security platform. Our security tools are being used to protect critical infrastructure including financial services organizations such as Morgan Stanley, telecommunication providers such as Telus, healthcare organizations such as Texas Children's, software companies such as Atlassian and several government agencies. And with our new Google AI threat defense, we are really excited to bring our new cyber model and code Mender to help our customers defend against AI threats.

[01:11:18]All of this is powered by our leading AI infrastructure. We offer the industry's broadest range of accelerators from Google and Nvidia, including the new Nvidia Verar Rubin platform and TPU 80 and ATI which delivers strong price performance. On top of this, let me mention three unique offerings.

[01:11:39]First, our Virgo network which is designed to meet the needs of modern large scale AI workloads. It allows customers to connect a million AI accelerators across multiple data center sites into a unified supercomput.

[01:11:52]Second, our software stack has native support for Jacks, PyTorch, VLM, and SGLAN, enabling workload portability across GPUs and TPUs. And third, our new agent optimized Axion CPU provides 30% better performance per dollar compared to peer offerings.

[01:12:12]We are seeing strong growth in demand for our AI infrastructure offerings from leading labs such as ineffable intelligence, next generation AI builders including CA, financial services like Deutsche, Borsa Group, pharmaceutical companies such as Fizer and Raj and robotics and spatial intelligence companies such as World Labs. We are continuing our strategy of investing in promising companies and internal efforts that bring pioneering AI research into the real world. We have seen exciting progress from our other bets. Whimo introduced its newest vehicle, WHigh, to public riders. This is the first vehicle powered by the sixth generation Whimo driver and will welcome more riders in the coming months. Winger safely completed more than 1 million home deliveries and we continue to grow our presence through partnerships with Walmart, Door Dash, and Papa John's. In health and drug discovery, Isomorphic Labs raised over $2 billion to power its AI drug design engine, scale globally, and advance its drug candidate pipeline.

[01:13:17]It's truly been an extraordinary first half of 2026 with much more to come.

[01:13:23]Thanks to all of our employees and partners worldwide for their incredible work this quarter. With that, Philip, over to you.

[01:13:31]>> Thanks, Andor. And hello, everyone. I'll start with a review of Google services, highlighting our momentum across search, YouTube, and partnerships. Google services revenues were 95 billion for the quarter, up 15% year-on-year, primarily driven by search. Search and other delivered 17% growth with retail and finance driving the largest contributions. YouTube advertising revenues grew 13% driven by direct response and brand. Network advertising revenues were down 1% yearonear.

[01:14:03]Strong performance in search and YouTube underscores how our investments in AI translate into measurable value for users and advertisers.

[01:14:11]Starting with search and other revenues reached over 63 billion for the quarter, Sundar highlighted the momentum we see in search which directly impacts our advertising business. We continue to accelerate the deployment of Gemini across our entire ads infrastructure to boost performance in three areas mentioned before. Ads quality, advertiser tools, and AI user experiences. First, ads quality. At Google Marketing Live, we showcased how Gemini improves query understanding, allowing us to find relevant ads for longer searches previously difficult to monetize. The core engine of our search ads relies on a dual prediction, delivering immediate utility for the user while maximizing measurable value for the advertiser. Gemini completely supercharges this capability. We use Gemini's advanced reasoning to decode the nuances of longer, more detailed queries. With shopping ads, for instance, we drove a 20% improvement in showing highly relevant ads, helping shoppers immediately find the best match. Second, advertiser tools. Take AIAX. It has become the core building block for advertisers to fully participate in our new AI experiences.

[01:15:23]It's out of beta and half a million advertisers have already adopted it.

[01:15:28]Those who adopt our AI powered campaigns like AIAX or PMAX see an average of 15% more conversions or value on search at a similar rorowass.

[01:15:38]AAA autoclop enterprises used AIAX to personalize creative assets and capture growth from increasingly detailed insurance searches. This led to a 17% improvement in conversion volume and an 11% decrease in cost per lead. We see strong adoption of our generative AI creative tools, which makes creative development easier, especially for SMBs.

[01:16:01]In fact, over half of our SMB customers globally use AI to create or optimize their creatives. Third, new AI user experiences. At IO, we showed how search, including AI overviews and AI mode, works as one connected experience.

[01:16:18]As you saw from our results, our performance across this holistic system is robust. We continue to be encouraged with monetization performance on queries that show AI overviews. Even as we've expanded AI overviews to more commercial queries across AI overviews and AI mode, people are asking more specific and detailed questions, providing opportunities for more relevant ads.

[01:16:42]Within AI mode, we continue to test and deploy a range of new ad formats. For text ads, we improve performance by adding contextual site links based on the conversation. Direct offers is gaining momentum with partners like IHG Hotels and Resorts soon surfacing special offers during trip planning and highlighted answers. Our latest experience placing clearly marked sponsored links inside list responses is showing early user traction.

[01:17:10]Looking at commerce in collaboration with the retail industry, we established the open-source universal commerce protocol UCP as the new standard for a gentic commerce. Merchants are rapidly adopting UCP with Target and Steve Madden now live, while new members have joined the UCP shopping and food tech councils to help steer its vision. We also announced Universal Card, allowing shoppers to add items from different retailers across Google services and buy in a single checkout. Now onto YouTube.

[01:17:43]As a FIFA preferred platform partner, we help fans around the world tune in to the games. As Sundar mentioned, over 1.7 billion unique viewers watched World Cup related videos and over 550 million watched them on their televisions. This made the FIFA World Cup 2026 the most viewed World Cup in YouTube history.

[01:18:03]Advertisers connected with fans through FIFA channel takeovers, Gemini powered soccer themed sponsorships, and game day must hats. And of course, a huge congratulations to Spain for taking home the trophy. More broadly, on YouTube, we introduced an exclusive slate of creator shows, making it easier for brands to tap into the fandom of creators. We launched custom sponsorships to put brands at the heart of the world's biggest moments as they unfold on YouTube, using AI to dynamically surface videos tailored to a brand's desired moment. Brands continue to partner with YouTube creators to engage new audiences.

[01:18:40]Kate Spade reached Gen Z through a firstofits-kind YouTube creator campaign and partnered with creators Ellie Thumman and Hannah Malashsh. By leveraging multiple format videos on YouTube, the brand drove a 3.25% brand lift in purchase intent. This unique conversions of brand equity and commercial action makes YouTube a powerful fullfunnel platform. SMBs continue to fuel our direct response growth through campaigns like demand genen. They leverage our AI to scale visual storytelling across YouTube, Shorts, and now Google Maps to attract high-v valueue shoppers across North America and Europe. Outdoor brand Arturix use demand gen to achieve a 70% better return on their ad spend compared to other paid channels. Looking at monetization across YouTube, we're driving sustained growth across our key priorities. In the living room, we see continued momentum across both brand and direct response. With the launch of buy with Google Pay, viewers can complete purchases directly on their CTV, turning the TV screen into a stronger performance surface. Shorts continues to deliver high performing opportunities for social and video buyers alike.

[01:19:51]Beyond advertising, YouTube subscription business, which thrives across living room screens, is growing faster than ads, particularly driven by YouTube music and premium. Internally, we leverage Gemini to transform how we work and how we serve our customers. 83% of our sales team uses Gemini assisted tools weekly, driving up to a 20% higher win rate when using customized pitch narratives. Our ads customer support teams use Gemini powered agendic solutions that now autonomously address 75% of support queries, freeing them to solve our customers most complex challenges. Similarly, our new agentic solutions for SMBs have expanded our reach by hundreds of thousands of new customers year to date. As always, ending with partnerships, we're seeing more businesses benefit from the unified strength of a Google's AI stack. Booking Holdings expanded a multi-year cloud commitment and are partnering closely to advance our AI powered ad formats. It's also deploying Google's AI technology to enable new customer experiences like agentic dining reservations on Open Table, helping restaurants get discovered and booked right when it matters most. In closing, I'd like to thank Googlers everywhere for their contributions to our success and our customers and partners for their continued trust. Anat, over to you.

[01:21:14]>> Thank you, Philillip. My comments will focus on year-over-year comparisons for the second quarter unless I state otherwise. I will start with results at the alphabet level and we'll then cover our segments result. I'll end with some commentary on our outlook for the third quarter and full year 2026.

[01:21:32]We had an outstanding second quarter delivering our 12th consecutive quarter of doubledigit revenue growth.

[01:21:39]Consolidated revenues were $119.8 billion up 24% or 23% in constant currency. Total cost of revenues was $45.9 billion, up 18%. Tech was $16.2 billion, up 10%.

[01:21:59]Other cost of revenues was $29.8 billion, up 22% driven by increases in depreciation, inventory costs, primarily from the sales of TPU systems to customers, and content acquisition costs largely for YouTube. Total operating expenses were up 27% to $33.1 billion.

[01:22:21]R&D expenses increased by 32% driven by compensation from investments in AI talent as well as depreciation.

[01:22:29]Sales and marketing expenses were up 18% due to investments to support the Gemini app and search and compensation.

[01:22:37]and GNA expenses increased 24% primarily driven by compensation and charges for certain legal and other matters.

[01:22:46]Operating income increased 30% to $40.8 billion and operating margin was 34%.

[01:22:54]Other income and expenses was $98 billion representing a substantial increase from the prior year primarily due to unrealized gains in our equity securities portfolio.

[01:23:06]Net income and earning per share increased significantly primarily due to the unrealized gains in OE I just mentioned. We generated a strong operating cash flow of $39.1 billion in the second quarter and $185.7 billion for the trailing 12 months. Capex was $44.9 billion in the second quarter with the vast majority of the spend in technical infrastructure to support our investments in AI. Approximately 60% of our investment in technical infrastructure this quarter was in servers and 40% was in data centers and networking equipment.

[01:23:44]We had negative free cash flow of $5.9 billion in the second quarter driven by our investments in capex. Free cash flow was $53.3 billion for the trailing 12 months. We ended the quarter with $242.5 billion in cash and marketable securities, which includes 87.1 billion of marketable equity securities.

[01:24:06]Long-term debt was $98.2 billion.

[01:24:09]And as mentioned in our press release, our board of directors declared a quarterly cash dividend on our common stock of 22 cents per share, which is payable in September.

[01:24:21]Turning to segment results, Google services revenues increased 15% to 94.5 billion, reflecting strong growth in search and subscriptions. Total advertising revenues were up 14% with growth across all major verticals. We experienced strong ad growth related to the World Cup, particularly in YouTube ads. Google search and other advertising revenues increased by 17% to $63.3 billion with retail and finance driving the largest contributions.

[01:24:55]YouTube advertising revenues increased 13% to 11.1 billion driven by direct response advertising as well as brand with strength in the living room. As Philip mentioned earlier, network advertising revenues of $7.3 billion were down 1%.

[01:25:13]Subscription platforms and devices revenues increased 15% this quarter to 12.9 billion due to strong growth in both YouTube subscriptions particularly YouTube music and premium and Google 1 which was driven by demand for AI plans.

[01:25:30]Google services operating income increased 20% to 39.5 billion and operating margin was 41.8%.

[01:25:40]The Google Cloud segment delivered outstanding results in the second quarter, driven by our enterprise AI products and services. Cloud revenues were up 82% to 24.8 billion, driven primarily by GCP, which grew faster than cloud overall. Core GCP, AI solutions, and AI infrastructure were all important drivers of growth. We also began to recognize revenues from TPU system sales which we delivered to customer data centers for the first time in Q2. Cloud revenue growth accelerated meaningfully even after excluding the impact of TPU system sales.

[01:26:19]Cloud operating income was $ 8.8 billion more than tripling year-over-year and operating margin increased from 20.7% in the second quarter last year to 35.6%.

[01:26:33]Google Cloud's backlog increased by more than $50 billion sequentially, reaching $514 billion in the second quarter. The increase was driven by strong demand for our enterprise AI offerings. The majority of the backlog is related to typical GCP contracts from a broad mix of customers, and we expect to recognize just over 50% of the total backlog as revenue over the next 24 months.

[01:26:58]In other bets, revenues were $382 million and operating loss was 1.8 billion as we continue to expand Whimo's business and invest in key other bets.

[01:27:10]And in Alphabet level activities, the operating loss was $5.8 billion driven by shared AI R&D expenses.

[01:27:19]Turning to our outlook and business performance expectations in the second half of 2026.

[01:27:25]First, in terms of revenues at the current spot rates, we would expect a slight FX headwind to our consolidated revenue in Q3 compared to a 1 percentage point FX tailwind in Q2.

[01:27:38]This impact will be seen primarily in search and YouTube ads.

[01:27:43]In Google services, as Philip mentioned, we continue to benefit from innovation in search by improving the user and advertiser experience with AI. At the same time, in Q3, we will begin lapping an acceleration in search performance that began in the third quarter last year.

[01:28:00]In Google Cloud, we're seeing significant demand for products and services, which we expect to drive strong growth. As I mentioned earlier, we started delivering TPU system to customer data centers in the second quarter. We continue to expect to recognize a relatively small portion of the revenues from our existing TPU system sales agreements this year.

[01:28:21]ramping as we exit 2026.

[01:28:24]We anticipate the vast majority of the revenues from these agreements will be realized in 2027.

[01:28:30]And given the supply constraint environment, we plan to expand the use of third-party capacity in Q3 as a bridging strategy while we build out more internal capacity. The strategy allows us to keep growing our customer base and capture greater overall value.

[01:28:46]However, it will create modest margin pressure in the near term as we utilize this capacity.

[01:28:52]Moving to investments, we are updating our fullear 2026 capex guidance range to 195 to $25 billion, up from our previous estimate of 180 to $190 billion. The increase in the range is primarily due to an acceleration in the delivery of capacity to meet growing demand. As we previously shared, we continue to expect our capex to increase significantly in 2027 and we'll provide more details at a later date.

[01:29:23]In terms of expenses, the significant increase in our investments in technical infrastructure will continue to put pressure on the P&L in the form of higher depreciation expense and related data center operations costs such as energy. We also expect to continue hiring in key investment areas such as AI and cloud. And we are investing in marketing to support our AI products.

[01:29:45]And finally, we expect the free cash flow will remain under pressure driven by our investments in technical infrastructure which enables us to capitalize on the AI opportunity and continue to drive attractive returns.

[01:29:58]Q2 represented another strong quarter.

[01:30:01]Our teams continue to deliver impressive innovation, executing with discipline and velocity. I want to take this opportunity to thank our employees for their contribution to our performance.

[01:30:12]Senator Phillip and I will now take your questions.

[01:30:16]>> Thank you. As a reminder to ask question >> while we listen, if you would like a studio tour of all behind the scenes of the studio, just vote in the poll and I'll share it with you. We're getting ready for our big event tomorrow night.

[01:30:29]We are covering the SpaceX launch. $1 million I've just invested in the stock.

[01:30:34]We'll share it all with you or not with more time in Genaii products and tools in the market and investment continuing to step up.

[01:30:44]>> Could you just kind of give us some perspective on how your view on the size of the overall geni ROIC opportunity and the timing of the ROIC has changed now versus one year ago? And then not you know you talked quite a bit about supply capacity constraints. Maybe a similar question for you around forward capex.

[01:31:03]How is your budgeting philosophy and just constraints you're putting on to forward spend? How how are those changing as you sort of think about the right amount to spend in 2027 to to close this capacity constraint?

[01:31:18]>> Look, uh thanks Brian. I mean it's a it's a good question. Um I do think uh you know it feels like uh we are in very early innings of uh what feels like secular shift across multiple areas uh in our core information businesses just the possibilities when I see what all you can do with absolute uh uh frontier capabilities there's still a lot of work ahead to translate all that into experiences for our our consumer consumer uses, you know, you can think about end to end agentic experiences to really meaningfully do a lot more for them. So all of that looks like extraordinary opportunities with extraordinary returns for executing well on those opportunities. Uh similarly on the enterprise side um you know as you can see from our uh demand which is reflected in our growth rates etc. uh again uh in in my conversations with many CEOs, many companies uh you know they're all still you know barely scratching the early stages of what's possible here. So I think you know we used to talk about cloud itself you know very few you know small percentage of overall workloads in enterprises have shifted to cloud now think about what percentage of workloads have are really AI native and AI enabled. Uh it again feels like very very early. So I would say you know from ROIC standpoint I think uh you know uh we are taking a full stack approach. uh we are seeing momentum across uh consumers and enterprises and developers and so on. So it feels like if anything over the past year we've gotten more bullish on the opportunities ahead I'll turn over.

[01:33:07]>> Thanks for the question on how do we think about forwardlooking capex in the context of um supply constraint. So we're still in a supply constraint environment. I think we've said this now for multiple quarters in a row and we are seeing very strong demand both from external cloud customers as well as across the business and our goal is to invest as long as we see an attractive return on that investment as Sundar mentioned earlier we do take a long-term view so we take multi-year view at what the needs are as well as uh focus on next year and the near term and building aggressively to meet those demands and As you've seen, well, we have increased our capacity quite significantly over the past 3 years, the demand still outpaces that investment and we are just the rest of the industry working in a in a supply constraint environment. So, we're working hard to do that. We do have a benefit of having a full stack approach. So, we're able to drive operational efficiencies uh technological efficiencies within our technical infrastructure organization so that we can deliver more compute. Uh but as long as we see these attractive opportunity to invest, we will continue to invest.

[01:34:22]>> Thank you both.

[01:34:26]>> Our next question comes from Doug Enmud with JP Morgan. Your line is now open.

[01:34:33]>> Thanks for taking the questions. Um one for Sundar and one for Anat. Um Sundar, can you just talk about your confidence level that the Gemini models can remain at the frontier? I know you had the Gemini, the flash model releases this week. Um, but Google perhaps doesn't make maybe quite as much noise as some of the other leading labs or or perhaps have quite the frequency. Um, just curious how you'd address any concerns about that ability to continue developing leading models. And then just related um can you talk about your plans for coding and and how you look to close the gap in that part of enterprise? Um, and then not just following the recent equity and and debt raises. um can you just help us understand how you think about optimal capital structure and how you view the cost of debt versus equity?

[01:35:19]Thanks.

[01:35:22]>> Uh thanks Doug. Look uh I think uh you know the frontier is uh incredibly uh uh dynamic space uh you know and and it's fiercely uh moving forward. At any given moment when you take a snapshot uh it feels dynamic. uh we are you know uh we've had clearly frontier models uh there are many attributes on which we are still at the frontier there are areas uh where we've acknowledged uh we need to improve coding and agent decoding is is an example of that and I think the teams are very very focused on it uh with 3.6 6 flash and by the way flash is our workhorse model and you know we see tremendous demand for it uh given it uh generally hits a a sweet spot of performance cost reliability latency etc and we've incorporated you know Gemini and flash particularly in our entire portfolio of solutions be in cyber security uh data analytics you know if you think about an area like customer service you need really good voice quality you need live streaming, you need the ability to reason on that or if you're a professional services firm, you need high quality summarization, content generation, etc. So, you know, flash does very well on all of that. In terms of agent coding, you know, we are iterating and you will see us make continued iterations. 3.6 6 flash for example compared to 3.5 flash uh jumped over you know um uh o over 10 points in deep suite as a benchmark and it is more token efficient uh doing so so we are clearly you know we using it internally we we testing it with many customers in coding uh so we see the progress uh just in a just in six weeks from the prior version to the new version and you will see more continued iterations on that as All uh in terms of the frontier, we are both uh very committed and very confident of uh being at the frontier. Uh for the next for the next generation of frontier, you're going to need a much larger base models.

[01:37:34]Uh we are uh now training Gemini 4 uh and uh we're being very ambitious with it. Uh I am very excited by the progress I'm seeing internally on uh Gemini 4 and I'm confident uh you know the people will be pleased when we are uh putting it outside but we will need Gemini 4 as a larger base model to compete at that frontier level and so we are focused on uh executing on that well >> and on the question regarding our capital structure and recent equity and debt raise. So as we think about our investment needs and you know as I said we look at the next year and multiple years out we first look at how much we can support uh based on cash from operations and as you've seen in our results today we continue to generate very healthy strong cash flow from operations. So that's our first source of funding and then we look at debt and most recently we did the equity raise and we have uh expanded our debt portfolio quite significantly over the past 12 months. If you've seen a year ago we were at about um 16 billion and we went to about hundred billion dollars across multiple currencies and geographies. So, we're expanding that portfolio, but we also want to make sure we have a resilient not just um growth outlook, but also a resilient balance sheet and a strong balance sheet, healthy balance sheet, which is what uh the the rationale behind expanding into the equity markets. At this point, we're not planning to go back to the equity markets with the exception of, as you recall, part of our equity offering was the ATM or at the market offering that we will do to address the stockbased company or the tax on SBC, which we'll do for some period of time. But we look at those three dimensions, the cash flow from operations, debt levels, and equity and a way to balance it in that in a way that ensures that we continue to maintain a healthy healthy balance sheet.

[01:39:34]>> Thank you both.

[01:39:37]>> Our next question comes from Eric Sheridan with Goldman Sachs. Your line is now open.

[01:39:43]>> Thanks so much for uh taking the questions. Maybe two if I could, both on TPUs. Sundar, can you talk about some of your key learnings as you scale your TPU efforts in terms of both the demand for TPUs and how you think about balancing the external demands for TPUs versus the internal demand for custom silicon inside the organization as you look over the next couple years and then not if I could just follow up you made some comments in your prepared remarks about the impact of TPUs on Google Cloud.

[01:40:13]didn't know if you could give us a little bit more granularity about the size of TPUs as a part of the revenue backlog and how to think about the revenue recognition over the potential for margin impact from TPUs in the years ahead. Thanks so much.

[01:40:27]>> Okay. Uh I think in terms of uh first of all we are very pleased with our uh uh TPU roadmap progress uh and uh and you know the the value uh in term in terms of performance uh you know and and and the edge it gives and we obviously use it extensively uh in terms of allocating our TPUs.

[01:40:50]Look, our first priority is making sure we are uh allocating what we need to compete at the frontier in terms of uh AGI development and so that is the foundation for everything we do. Uh but you know given the extraordinary demand uh to balance the external demand uh even for most cloud customers uh we are using you know both um TPUs and GPUs mainly for serving our models. So think vertex AI, Gemini enterprise uh the momentum VC. So we using it or or agentic workloads etc. So we are we using it for uh those purposes to the extent people want it as infrastructure uh you know we are balancing it by increasingly looking at opportunities to put TPUs in uh in in their data centers or in uh other data uh data centers like the project we are doing with Blackstone. etc. So we using that as uh an ability to balance and and make sure you know we are allocating as much of the available compute for frontier model development as well as serving uh both our consumer business and our enterprise business in terms of first party models >> and in terms of uh revenue recognition and how we look at the TPU system sales.

[01:42:13]So the way to think about it is the following. When we sign the agreements that I've mentioned in the prepared remarks, they would be then reflected in the back the cloud backlog. Now the vast majority of the 514 billion of cloud backlog is the GCP agreements, but the TPU system sales are reflected in that backlog. We start building inventory to be able to sell those systems. So you see that impact on the cash from operations because we built ahead obviously as we're building that business and ramping up and then once we start delivering the sales generally that's when we start recognizing revenue. This quarter was a a small amount of the total uh that total agreement will continue to ramp up throughout 2026 but then you'll see vast the vast majority of the revenue from that agreements come through in 2027.

[01:43:09]Your next question comes from Ross Sandler with Barclays. Your line is now open.

[01:43:16]>> Uh yeah, just back to the uh AI model kind of war that's going on Sundar. Um just wanted to ask about like the speed of model releases um and how you can uh potentially speed up the cadence by which Gemini is releasing models. So, we we all saw the um third party compute deal with with SpaceX. Uh what else are we doing to kind of speed up the pace of model releases uh compared to some of the other folks out there? And then you just mentioned the flash models which have been very successful to your point.

[01:43:52]Um, do you view that as like the right end of the market to be in uh given how crowded the lower cost end of the model space has become? Just any thoughts on how you see all that playing out.

[01:44:07]>> Uh, thanks Ross. Look, I mean, two things I'll say. First of all, um, we are, you know, we really think about the parade of Frontier. you know we want to make sure for our customers we are offering uh you know best model uh best models at various uh price points right so you know you will see us it's but it's very important to us to have the best frontier models out there um uh as well as uh models which are uh very performant and low cost. This is why we have flashlight, flash pro, etc. And and with uh you know, so we we are committed to being at the full parade of Frontier.

[01:44:48]Um on the on the speed of model releases, uh I do think you will see us um you know, continue to pick up pace.

[01:44:56]Uh you know, obviously you've seen us come with uh you know, we announced 3.5 flash at we followed that up with 3.6 six flash and you'll see continued iterations of uh of that model uh with further progress in agent decoding etc. We are really focused putting a lot of effort into Gemini 4 uh uh it's a very ambitious effort. We wanted to compete at the frontier level of where the frontier will be when Gemini 4 uh comes out and so we are applying a lot of our compute and effort in that direction.

[01:45:28]But with that we are creating a baseline on which on top of which you will see us uh rapidly iterate with uh subsequent uh model uh model releases. And so you know picking up pace and uh releasing models ob you know almost at a monthly cadence is part of our road map as we are building uh Gemini 4 as well.

[01:45:54]Your next question comes from Michael Nathansson with Muppet Napson. Your line is now open.

[01:46:00]>> Thank you.

[01:46:02]>> Tomorrow night we're covering the live Starship flight 13 $1 million all in >> the links in the chat. Pin to the top.

[01:46:10]Click on it now. Bookmark it. Like and share and join us live. Deep dive lifellight. $1 million on the line. Join us. It's going to be explosive.

[01:46:20]>> Not literally. what gives you the edge to keep growing like you're doing and then not back to Eric's question anything you tell about the margin impact on TPUs going forward right is it incremental margin to the core cloud margin or is it a lower margin coming through thanks >> look Michael I mean first of all look there are many um many layers at which we are providing solutions right I think part of what uh what the value of our full stack approach is customers are coming to us for solutions. So if you if you take an area like cyber security or data analytics people are people are deploying uh solutions in which models are an ingredient in that solution right so uh take cyber people are uh using chronicle and viz and you know with our upcoming codemen product you know they're using it to uh detect and patch vulnerabilities and so on uh or take data analytics people are uh bringing what's been in the past siloed uh data sources putting it all together and having an intelligence layer on top of it with Gemini enterprise and and and so so the model is just an ingredient in those solutions so I think it's important to remember that then even within where you're purely on a more model consumption uh area you know people are you know you know there is what looks as models are increasingly becoming end to end uh orchestrated ated systems, right? Workflows, agentic workflows, and to develop all this. It's it's your ability not just to bring the uh the compute you need to train and serve the data quality, the environments you have, your ability to continually improve. Provide customers with that peace of mind that all the data they have, their data, their trajectories are confidential to them. None of that in any way flows back to the models. their ability their ability to configure and serve all this in a secure way and manage it and provision it and so on. So these are big end to-end things and so this is what our cloud business as a whole is focused on uh building it and you know and we are seeing demand across all of these components and so obviously having our own models allows us to really optimize these solutions and bring a integrated offering but we will also provide other models as part of these solutions. uh we also bring infrastructure as part of these solutions etc and take a whole full stack approach so I think we are very very well positioned there >> and on the TPU margins we don't break out margins for any specific products or infrastructure component u and certainly there are benefits from designing and manufacturing our own chips but the way to think about it is this is an expansion of our total addressable market so it's it expands the opportunities by providing uh solutions to customers that uh need those systems in their data centers. But overall, if you think about the cloud margins, obviously a really fantastic expansion of margin to 35.6% this quarter, outstanding strong operational uh discipline across the business and leveraging growth in the top line. And now as you think about Q3 and through the remainder of the year and I've mentioned some of in the prepared remarks given the supply constraint environment we're in we are planning to expand the use of third party capacity in Q3 as a bridging strategy while we continue to build out internal capacity. Uh that capacity given the cost of that capacity will put some pressure on operating margins for cloud. Uh and then the last item we mentioned in the past was the integration of whiz does create some headwind uh here in the in the near term in 2026 relate to the acquisition.

[01:50:17]>> Thanks guys.

[01:50:20]>> Your next question comes from Mark Schmoolik with Bernstein. Your line is now open.

[01:50:26]>> Uh yes, thanks for taking the questions.

[01:50:28]uh Annette just on these uh third party deals and and kind of the bridge in capacity is there a particular objective where the constraints are most severe or is it really broad-based and I guess you know stepping back a bit and thinking about capacity allocation across the businesses has that changed at all or is there a way to contextualize you know how you're now thinking about the trade-off between allocating compute to search versus model training versus for the GCP business thank you >> uh Mark I can comment on it like you know look again on on allocation I think uh look we the baseline with which we start is uh what it takes to you know continue AGI development at the frontier obviously you know the priors on that are just based on where the model frontier moves and so we start with that as a baseline and beyond that you know we we want to obviously you know we are prioritizing our core product areas like search YouTube etc as well as cloud and within cloud out. We are prioritizing the compute to make sure we can uh serve uh our models uh you know in the context of vertex and Gemini enterprise uh and our our our core solutions be it data analytics and cyber security etc right so our core uh serving for our core products across consumers and enterprise is where the computers primarily uh primarily going and that's how we uh think about it I think on the on the bridge bridge deal. The main thing I would say is look there are on the margin there are very very large customers of ours uh on on cloud who we we are trying to support them through this extraordinary moment and and and the incremental opportunities they are bringing to us uh while a short-term cost over a few months may be very high in the lifetime of the deal as we bring more capacity on is highly ROI positive right So those are factors we are taking into account. So are you willing to you know uh take upfront uh six-mon deal to to be able to serve that customer in what is a multi-year opportunity uh where the margins and the returns are very very attractive over that multi-year horizon. So hopefully that gives some color on how we thought about those opportunities.

[01:52:52]Your next question comes from Ron Josie with City. Your line is now open.

[01:52:58]>> Great. Thanks for taking the question.

[01:53:00]Maybe I'll switch topics somewhat and Philip ask you a little bit more about monetization from a from a search and YouTube perspective. Just given the greater signal we have with AI searches and then you talked about YouTube strength. Talk to us just a little bit more on how advertisers are leveraging the greater personalization and targeting that Google has to drive this rorowaz. And you know a question we often get is Google is at size and scale we're still growing 17%. Any reasons what's driving that that all-time high on searches? Thank you.

[01:53:32]>> Yes, thank you so much for the question.

[01:53:34]Look, our 17% year of year growth rate uh in the Q search and other revenues was really driven by many parts of our business working well together and uh very very deep Gemini integration. Um maybe to zoom out for a second all the major verticals contributed to the growth. Retail drove the greatest contribution. I managed this followed by really meaningful contributions from finance, tech, media, entertainment, uh and so on. Uh I think it's really important to understand that Gemini supercharges our ability and this goes specifically to your question to understand what people are looking for and match the right ads. So we're applying Gemini models really across our entire ads infrastructure whether it's ads quality advertising tools uh ads and new AI experiences and we're really deeply integrating Gemini into the customer tools to make the campaigns more efficient which comes on top of this and then we have our AI powered campaigns like AI max that help advertisers actually adapt and find the opportunities beyond keyword again that's an ability for us to to go deeper and target better and AI max continues used to unlock we mentioned this billions of net new searches that weren't really monetizable uh before and then uh on the YouTube side high level um the ads growth was driven by direct response and brand advertising uh I shared earlier we continue to see a lot of amenting in the living room um we have a really exciting ads roadmap as well ahead of us on the brand side on the direct response side uh demand gen and insurance remain really interesting opportunities here again this has uh targeting uh components to it obviously.

[01:55:11]Um and we continue to innovate really heavily in diverse bonds with shoppable ad formats in the living room uh which will help us drive strength in retail as well.

[01:55:26]>> Your next question comes from Ken Gowski with Wells Fargo. Your line is now open.

[01:55:32]>> Thank you very much. Uh two questions please. First, h how would you assess the forecasted returns on compute capacity investments in in 27 compared to prior years 25 and 26? Uh in light of the supply contra uh the supply chain constraints and supply chain inflation we're seeing. I I'm I'm curious as to how you think about the return profile of 27 and kind of future investments versus past investment investments in capacity. And the second one, a little diff different topic here. Um, when you think about Whimo, what are the key factors you would consider when evaluating that, you know, a change in corporate structure for Whimo? I know you've previously been reticent to talk about this, but the business is scaling.

[01:56:20]Uh, clearly there's leadership there and and has a lot of momentum. Under what conditions would it make sense for for Whimo to live outside of Alphabet? Thank you.

[01:56:31]Look Ken on your on your first question uh if I understand it uh you know look you know we are working of a discipline uh ROIC framework here obviously um you know we to the extent that our input costs going up to us uh you know we reflect that uh you know in in in our ability to you know price our solutions and see returns there. So all of that is factored into how we are uh planning. uh I think our compute capacity investments in 27 uh I think to the first question I answered I think we are uh you know we we are seeing strong demand indicators including long-term deals the existing deals which we have which are renewing at uh at uh you know with exceptional demand on a moving forward basis and so we are using all that to plan and invest accordingly and so you know I I I think if I think the dynamics look uh uh healthier than where we were about year ago and so that's that's what gives us the confidence to undertake those investments on Whimo. Look, I I think we are really focused on executing and scaling up uh Whimo. We have uh you know we have set it up uh w with our bet structure and and given the team a lot of support uh you know alphabet has continued I think our ability to think and plan longterm um and and invest in the business is a and and give them that um you know long-term uh roadmap uh uh you know the confidence in undertaking a long-term road road map and scaling up I think is all hugely valuable.

[01:58:18]uh we really focused on scaling the business right now and and uh and executing to that extraordinary potential and that's what we are focused on.

[01:58:28]>> Thank you very much.

[01:58:32]>> Our last question comes from Shria Kajura with Wolf Research. Your line is now open.

[01:58:39]>> Okay. Thanks a lot for taking my questions. Um could I please ask you two? One is on TPU long-term strategy.

[01:58:46]um longer term is it fair to think that as TPU sales scale you'd build merchant silicon business with a software stack that goes with it and second is on YouTube revenue uh given how strong engagement is what are some of the factors that could drive accelerating growth rate at YouTube um on a go forward basis thank you >> you know maybe um I'll answer the first one and Philip can broadly talk about YouTube uh revenue growth growth as well. Um on on the on the first one on on TPUs um um look I I think we are we've been operating with TPUs for a while. uh you know a lot of our cloud serving uh is done on TPUs and and we are also seeing strong demand for uh TPUs as standalone systems uh from from other customers and so we'll you know obviously the industry is has constraints too so we have to plan and we allocate on a forward-looking basis along the principles I spoke about earlier so I don't want to project out too far into the future there but uh I do think we are uh you know obviously we are we will scale up uh based on the opportunities we see and the demand we see uh commensate with the constraints that exist and the allocation needs we have for frontier model development making sure we can serve our consumer businesses and and enterprise businesses well uh well and and Philip uh you want to add on YouTube uh monetization >> yes Uh thank you so much. So look uh I mentioned it uh the drivers of YouTube ads revenue growth. Uh I think there's a lot of things we're actually excited about. When we look at our ads road map here uh in brand we see uh ongoing opportunities on connected TVs in the living room. Uh we're building tools to help advertisers find creators uh scale across screens and then measure the results and we have a slate of new and recur returning creator shows that are coming exclusively to YouTube. uh we see opportunities in direct response particularly with demand genen demand genen and and shorts I mentioned it remain a really interesting opportunity here to expand our base uh to more small and medium advertisers across more verticals shorter videos actually uh this important one create more opportunities for less disruptive ads uh increasing the overall ad effectiveness uh so we're going to continue to see a lot of innovation uh in my opinion in direct response with shoppable ad formats uh in the living room. Um, which again we mentioned that drives retail strength. Um, we announced a few other other formats here at Brandcast that we announced buy with Google Pay to enable CTV viewers to actually complete purchases directly on their TV with two clicks, which is a really interesting opportunity over time. We launched the affiliate partnership boost uh to drive incremental sales um and uh the creator earnings obviously from YouTube shopping affiliate commissions. Uh so overall like uh frankly very very exciting times.

[02:01:58]>> Thanks Linder. Thanks Phil.

[02:02:02]>> Thank you. And that concludes our question and answer session for today.

[02:02:06]I'd like to turn the conference back over to Jim Freedelland for any further remarks.

[02:02:11]>> Thanks everyone for joining us today. We look forward to speaking with you again on our third quarter 2026 call. Thank you and have a good evening.

[02:02:20]Right, let's wrap this up. What a night.

[02:02:24]So, everything I heard there was good.

[02:02:27]As expected, I work for Google. I work for YouTube. Obviously, the ad revenue was good. I made a big bold move tonight. I put $1 million all in on SpaceX. One stock, one asset, all margin, all outside borrowing, all in for tomorrow's launch. $1 million.

[02:02:48]We're all in on one stock. Currently down a lot of money at the moment.

[02:02:54]Started buying around about the 137 140 and I've been doubling doubling doubling all the way down. Tonight's Google report was good for me. Google owns SpaceX. They never mentioned it. Uh it's a small part really, but uh it would have been nice for a mention, but they didn't. I was listing out for it. Um so here's uh there you can see 31 32 grand down today. I was at 42,000 yesterday.

[02:03:19]I'm down 32,000 today. Preparing for a major event tomorrow. Everything on Google sounds great. Um, it's expensive though. There will be a pullback before we see an accelerate. I want to thank everyone who uh who tapped the like button tonight. We nearly hit 500. I was trying to get to 500 likes. We got to 462.

[02:03:40]Thank you ever so much. And thank you ever so much everyone who subscribed. We gained about 200 subscribers tonight, which is very nice. It's a nice little thing, isn't it? Anyway, this is what comes next. This is going to be massive. If you want to join us for a special live event of Starship 13 launch with $1 million in play, I could be up a million dollars tomorrow. We could double our position. I mean, it could be uh because I'm in margin, so it could amplify that. This is the event tomorrow. If you want to go there now, tap a like and click reminder. You might want to share it on social media.

[02:04:19]There's the event. You might want to join us for this tonight. Uh tomorrow night, we're going to do a a deep dive, a special. We're going to go through all the numbers. Uh and we're going to look at it. Is it a good business to buy? And then we're going to cover the launch live. It's going to be fantastic. Of course, if we if we get a delay or a problem or it blows up, not going to be quite so good for me, I got to be honest. But you don't win without taking chances. And I've decided to go all in.

[02:04:49]And that is what I'm doing. I hopefully you'll join me for the event. It's going to be very exciting indeed. I'm really kind of looking forward to the event uh itself. I'm I'm not worried. Uh but of course I can't control what happens to a rocket. Anyway, what we're going to do now is there's no um Discord event tonight because uh we had an extended show with this. I'll see you back in the morning. We've got more from Vaz who's live at the biggest air show in the world. We are Press Media alongside BBC, Sky News, Fox, CNN. We are there bringing you all the live news. Today we had new product launches. The public haven't seen it yet. We were there bringing it to you. Go and check that out. If you've enjoyed the show and you like a souvenir underneath the video, you can see running along the bottom of the video is uh all the merchandise. You have t-shirts and hats and all all kinds of all kinds of great stuff. Um if you want the links, there's X if you want further information. Oh, hang on a minute. With someone has just found the bold eagle >> 100 jewels eagle >> eagle, congratulations. you just found one of the magic uh one of the magic uh jewels that supports the channel and also you get a little surprise as well.

[02:06:03]Oh, we got Mark. Hello, Malik. Welcome to you. So, if you want to follow me on X, you'll get all of my uh information for the buildup tomorrow on SpaceX. $1 million invested. There's my Instagram if you want to go behind the scenes for the personal stuff. Um there might be some personal stuff tonight shared uh on on uh on Instagram. If you want all the software, seeking alpha and alpha spread, free shares in Robin Hood, free shares in uh Robin Hood USA and free shares in Robin Hood UK, there is the link there. I'm not sponsored by anybody. I I turn down sponsorship every day. 50 grand a day I get offered to I I don't want to be a sponsored channel. I make money investing. I want to just help people with our Discord server and all the other good stuff. There's our award-winning newsletter. We had the verification tick from YouTube, which means we are genuine and authentic.

[02:06:54]We've we've won the award for best value as well for memberships five years in a row. No increases, no inflation, and we provide the best level of service. We're very proud of that. Right, that's it from me. What I'm going to do now is uh you've all got the link for tomorrow's event.

[02:07:11]Uh where am I going to send you now? Am I going to send you to tomorrow night's event or am I going to send you to the extra channel? Um because from there I can give you the link, can't I? We're live there now doing a repeat on the today's events. Yes. Um sending you now to the extra channel where we're going to recap today's events for you and uh I will send you there now. It will take there automatically and you can catch up with the today's events live now on Extra. That's it from me. No Discord event tonight. If anyone clicks the Discord link, I will go and on board you and uh get ready for those trades, get ready for those moves. Alan Jandro, nice to have you here. We're here to help people, support people, be the most honest, genuine channel on YouTube TV.

[02:07:57]So, I'm all in. $1 million with um with SpaceX. Tomorrow is going to be a massive day. Let's hope the weather's good. Let's hope that the uh the um Starship 13 goes goes off well.

[02:08:11]We're going to go down to Bokhica and touch the rocket soon. Uh we've got friends who work there and we're going to go up and see it. So, a little little event we're putting on for all the members. Something kind of cool. Anyway, that's it from me. Have a wonderful wonderful evening. I wish everyone the best of luck tomorrow. It's going to be very dramatic and I'll see you in the morning. Have a very peaceful night.

[02:08:30]Look out for Discord for the trades throughout the night. Do expect to see some movement tonight. Uh, I'm not confirming it, but there could be some movement around two or three o'clock.

[02:08:40]Again, I think some institutions are going after that report tonight to buy SpaceX. See if I'm right. Be careful if you're trying to make money on Virgin Galactica at the moment. The big money's left it again and uh it's being pummeled again. So, be very careful chasing it.

[02:08:56]Uh, that that I think you're better off with SpaceX, which is why I've done it.

[02:09:00]But, we are getting a nice bounce after hours tonight. Um, Virgin Galactic's bouncing exactly the same as well. In fact, slightly more tonight. So, anyway, look out for the overnight action. Um, and I'll see you all in the morning.

[02:09:12]That's it from me. Till next time, as always. Electrum 2. Yes, Electrum 2.

[02:09:17]Terry Rose. Absolutely. All of my moves, all of my trades, all on Electrum. Yes, I've been posting them all day.

[02:09:24]Hopefully, you've been watching them.

[02:09:25]Um, if you've turned on email notification from YouTube, you'll get them emailed to you as well. But on the community tab, I've been sharing about Oh my god, two 300 grand today worth of uh SpaceX. So, take it to a million.

[02:09:38]Anyway, there you go. Have a wonderful evening. Did anybody have any questions?

[02:09:42]Not me, Tesla, and SpaceX, says Steven Luwendowski. Understandable. It's very high risk. Take care. Enjoy your day.

[02:09:50]Starlight uh Alphabet is bouncing. Yeah, it was a good a very good uh call tonight. I'm very happy uh with it. Um, let's have a quick look. Yeah. Well, you say you say it's bouncing. It's not. I don't know why you're saying that. It's going down. Um, anyway, have a wonderful evening, Ninja Cowboy. I I have Thank you. I have it on my desktop icon. Oh, that's wonderful.

[02:10:14]Thank you, Terry. Um, that's it's it's amazing really when you think about it. I make a trade and within minutes people around the world see it and they're looking at it. And I take that I take that as a that take the responsibility very seriously. Anyway, there you go.

[02:10:34]Emotam, is that right? Hope I' got that pronounced correctly. I'm exhausted. I'm tired. It's very difficult. Uh doing all day, 12 hours, and investing a million bucks, researching, bringing it all to you. I'm whacked. I'm going to go and have a cup of tea. Uh and I'll see you all in the morning. Let's see what happens. Are we going to go to 2 million bucks tomorrow or we're going to sell for massive losses? I might be forced to if it goes down too much. We shall see.

[02:10:59]This is how close I am to a margin call.

[02:11:02]34.38%.

[02:11:05]34%. I'm all in one stock. SpaceX 100% 34% for a margin call. It drops 34 34%.

[02:11:16]And I shall be marginal called. It's uh really simple as that, isn't it? Anyway, it's not rocket science. If it even if it is rocket science, that's it. Angel says, "Should I sell my alphabet? I have no idea. I don't know who you are. Never met you before. You're not one of my members. Are you?" If you come to If you're a member and we discuss things together, we'd understand you. If you came to uh Discord, we could talk about your position and understand you. But I don't know who you are, so I can't possibly make any judgment what you should do. We like to help people here, not just tell people what to do by clicks and get clicks. And we're not a YouTube channel. We just broadcast on YouTube TV. There's a difference. We're not sponsored by anyone. We do things differently here. SpaceX is made to go up only. Jerry Copeland. Well, I certainly hope so, mate. I certainly hope so because I've put every single penny I've earned in the last five years all on it. Um I liked it was going down.

[02:12:11]I love when shorters all pile in because they always lose eventually. Um and um you can't beat it. You cannot win over innovation. You know, profit is profit.

[02:12:22]People will buy. there's plenty of money to buy and they they will they will buy it. Remember this is part of the NASDAQ.

[02:12:28]Every month people are buying SpaceX whether they like it or not. To short SpaceX is full hardy and you will lose your money. The question is how low does it go before people have to sell through margin. And of course the carry trade is an issue but that's not going to happen until uh at least next week.

[02:12:46]And I mean that October is the is the time when I think it's going to happen.

[02:12:51]But next week we're going to cover the Japan live rate decision and that could trigger could trigger it. I don't think so. I think we're building into it rather than a surprise. But uh anyway, I'm new. Just arrived says Angel. What where you from? Where you from, Angel?

[02:13:06]Lovely to have you here. Uh male or female, where you from? What country?

[02:13:10]What state if you're America? We have 76 countries. I'm Martin Lucas, voted by Sir Elton John as the world piano man.

[02:13:17]Uh, I've been investing since I was 17 with Barclays Bank and uh, I built a YouTube channel because my touring days were over because of COVID and I decided to touring as a as as a musician. I decided to build a YouTube channel and build the best YouTube TV studio in the world, which I think we have got. Um, there's a grand piano at the back of the room and all the lights come to life and there's a special effects and everything in here. But, uh, um, yeah. and and uh we're not here to sell videos. We do things very differently.

[02:13:50]We're here to help people and uh I do my job and I share my thoughts and and that's what this channel is about and that's why we have 98% of the live viewers are members. Welcome. That nice.

[02:14:01]You got a nice welcome there. I'm new.

[02:14:03]Just arrived says says Angel. And Terry Rose gave you a welcome as well. Oh, there we go.

[02:14:08]>> I can't believe this.

[02:14:11]>> A Terrar investor has become a member.

[02:14:14]Thanks for all you do. You are very welcome, Terry.

[02:14:19]It's my greatest pleasure. It's the best job in the world. Right, I'm out of here. You got me to stay on a little bit longer, but I am exhausted. So, that's it from me. Have a very peaceful evening. I wish everyone the best. Oh, subwoofer. We're all here with you, Martin. Take a long break. Look at the sky or something. Oh, doesn't that sound wonderful? Doesn't that sound wonderful?

[02:14:42]Subwoofer. Yeah, I might go and do that now. Uh, I'll go outside. Look at the sky.

[02:14:49]You know, why do we do all this anyway?

[02:14:51]It's crazy. Uh, I could have walked away with the money I've got. I don't even need it. I don't even spend it. But I just liked winning. And uh I want I want to be in SpaceX when we have a great flight, great launch, and uh we go right through a million dollars. It just be it'd be another win, another another little life's achievement if we can do it. But we've gone all in. Got a million bucks. We've used margin, but hopefully we can go to a million and pay back the margin and still have a million in cash.

[02:15:23]That would be really something else.

[02:15:27]Will we do it? Well, tomorrow we'll find out. That's it from me. Have a wonderful evening. Love you all and have a very pleasant evening. Till next time, take care of yourselves and each other. Bye for now.