Key Highlights

  • Alphabet (NASDAQ:GOOGL) reported second quarter 2026 revenue of USD 119.8 billion, up 24%, with Google Cloud revenue of USD 24.8 billion, up 82% from USD 13.6 billion a year earlier.
  • Google Cloud contracted backlog reached USD 514 billion, above the roughly USD 488 billion analysts expected, according to coverage of the July 22, 2026 report.
  • Reported second quarter earnings of USD 9.11 per share included about USD 98 billion of other income, mainly unrealized gains on equity investments, not core operations, so it is not a clean profit guide.
  • Alphabet has guided 2026 capital spending to USD 195 billion to USD 205 billion, and reports third quarter results after the close on October 28, 2026.

A Backlog Built on AI

Alphabet (NASDAQ:GOOGL) reported on July 22, 2026 that Google Cloud revenue rose 82% to USD 24.8 billion, while backlog reached USD 514 billion. Total revenue was USD 119.8 billion and operating income USD 40.8 billion, a 34% margin. These figures come from coverage of the release and were not matched line by line to the filing. The company has now delivered 12 straight quarters of double-digit revenue growth, and the cloud segment is a large driver. The backlog matters because it is contracted future revenue, and a few AI customers can move it sharply. The chart shows Alphabet at USD 4.2 trillion with arrows to Anthropic and Nvidia (NASDAQ:NVDA), the second being a chip supplier that also competes with its own TPU line.

The Anthropic Loop

Anthropic was reported in May 2026 to have committed USD 200 billion to Google Cloud over five years for about 5 gigawatts of TPU capacity co-developed with Broadcom (NASDAQ:AVGO), with deployment from 2027. Alphabet was reported to invest up to USD 40 billion in Anthropic, USD 10 billion upfront and USD 30 billion tied to milestones. Both figures are reported, not confirmed in a filing. If true, Alphabet funds a customer that returns much of the cash as cloud spend, while Alphabet books gains on that stake, which helps explain part of the USD 98 billion other income. The mechanism is simple: a higher private valuation raises the carrying value of the stake, and the gain shows up in earnings without any cash arriving.

Risks and What to Watch

Gains on private stakes can reverse, and a USD 200 billion commitment equals about 39% of the USD 514 billion backlog, simple arithmetic that assumes the full amount sits in backlog, which is not confirmed. Capex of USD 195 billion to USD 205 billion needs revenue to follow, and the stock slipped about 1.2% in extended trading after the July report as investors weighed spending. Watch Google Cloud growth, backlog and capex commentary on October 28, 2026, plus Amazon (NASDAQ:AMZN), which competes for the same lab and reports the next day. Anthropic's valuation of USD 965 billion on the chart, set in rounds where Alphabet and Amazon take part, is itself a variable that could swing reported profit in either direction.

Where Things Stand

Alphabet (NASDAQ:GOOGL) is a beneficiary and a funder of the AI loop. The cloud numbers show real demand, with 82% growth and a USD 514 billion backlog, but part of reported profit comes from equity gains and part of the backlog may come from a customer it also finances. The October 28, 2026 report will test whether growth and capex stay in balance, and whether equity gains again dominate headline earnings.