Google parent Alphabet (GOOG, GOOGL) will report second-quarter earnings after the bell on Wednesday as Wall Street prepares to get one last look at how hyperscalers are monetizing their massive investments in artificial intelligence.
Investors have recently retreated from AI trading as they continue to digest the huge costs of data centers and chips to support their AI platforms. At the same time, technology companies have repeatedly said that their capacity is limited because demand for computing power exceeds the available supply.
Alphabet-owned Google, like its AI rivals, is also under constant pressure to release ever more powerful AI models. Any delay could give the challenger the space it needs to get ahead of the competition.
Alphabet CEO Sundar Pichai speaks at the Google I/O event in Mountain View, California, May 19, 2026. (AP Photo/Jeff Chiu) · AP Photo/Jeff Chiu
According to Bloomberg, Google has delayed the release of the Gemini 3.5 Pro due to concerns about its capabilities compared to other leading models.
Google, however, retracted the report.
“We are rapidly delivering a wide range of models while maintaining their high cost-effectiveness for customers,” a spokesperson told Yahoo Finance. “We are currently testing 3.5 Pro, the updated Flash model, and other models with partners, and we are working productively with the US government.”
Alphabet shares have performed better than its peers, up about 4% over the past three months, although the stock has fallen to a 52-week high.
Shares of Amazon (AMZN) have remained relatively flat over the past three months, while shares of Meta (META) are down nearly 6%. Microsoft (MSFT) shares fell 5%.
Alphabet also got a boost Monday after The Information reported that Google is developing a new chip that could improve efficiency when running Gemini. The chip, codenamed Frozen v2, will incorporate Gemini pieces to reduce processing time.
For the second quarter, Alphabet is expected to report earnings per share (EPS) of $2.95 on revenue of $116.98 billion. Revenue excluding traffic acquisition costs is expected to be $101.5 billion. During the same period last year, Alphabet posted a profit of $2.31 on revenue of $96.4 billion.
Google Cloud Platform (GCP) revenue is expected to reach $22.4 billion, up 64% from the $13.6 billion the company reported in the second quarter of 2025. GCP has been Alphabet’s main growth driver over the past few quarters as customers have gravitated toward the company’s artificial intelligence offerings.
Remaining performance obligations (RPOs), or contracts that Google has yet to fulfill, are expected to exceed $488.1 billion, up 351% from last year’s second quarter.
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Email Daniel Hawley at dhowley@yahoofinance.com. Follow him on X in @DanielHawley.
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