Alphabet Inc Class C (NASDAQ:GOOG) stock rose 1.92% (As on July 24, 11:28:55 AM UTC-4, Source: Google Finance) after the company increased its forecast for capital expenditures in 2025 to $85 billion due to “strong and growing demand for our Cloud products and services” as it continues to expand infrastructure to power more AI services that use its cloud technology. That’s up from the $75 billion projection that Google provided in February, which was already above the $58.84 billion that Wall Street expected at the time. In its second quarter earnings, Google reported that cloud revenues increased by 32% to $13.6 billion in the period, while analysts were looking for $13.1 billion. The demand is so high for Google’s cloud services that it now amounts to a $106 billion backlog. The company has recently launched AI Mode in Search, a chatbot-like interface similar to ChatGPT, and expanded AI Overviews to over 2 billion monthly users. The strong quarter comes as Alphabet faces legal pressure. A federal judge in Washington, DC, recently ruled that Google violated antitrust laws. A decision on potential remedies, including a proposed breakup of parts of Google’s business, is expected before Labor Day. Further, Alphabet has been aggressively expanding the operations of Waymo, which may soon face increased competition as Tesla ramps up its robotaxi business.

Meanwhile, Advertising revenue came in at $71.3 billion versus expectations of $69.6 billion. Search revenue topped out at $54.1 billion versus an anticipated $52.7 billion. YouTube ad revenue was $9.8 billion versus expectations of $9.5 billion. Google Services revenues increased 12% to $82.5 billion, reflecting strong performance across Google Search & other, Google subscriptions, platforms, and devices, and YouTube ads.

GOOG in the second quarter of FY25 has reported the adjusted earnings per share of $2.31, beating the analysts’ estimates for the adjusted earnings per share of $2.17. The company had reported the adjusted revenue excluding traffic acquisition costs (TAC) growth of 14 percent to $81.2 billion in the second quarter of FY25, beating the analysts’ estimates for revenue ex-TAC of $79.6 billion. Total operating income increased 14% and operating margin was 32.4%. Operating margin benefited from strong revenue growth and continued efficiencies in the expense base, partially offset by a charge related to a settlement in principle of certain legal matters. Net income increased 19%. Alphabet’s total operating expenses rose 20% from a year earlier, to $26.1 billion.