Google Cloud’s quarterly revenue exceeded $10 billion for the first time, and Alphabet spent almost $13 billion on servers

Alphabet Holding, the parent structure of Google, published its results for the second quarter of 2024, which ended on June 30. Alphabet’s results exceeded analysts’ forecasts. The holding’s revenue amounted to $84.74 billion, which is 14% more than a year ago, while exceeding the consensus forecast of analysts surveyed by LSEG, equal to $84.19 billion.

Alphabet’s net income for the second quarter is $23.6 billion, up $5.2 billion from $18.4 billion in the same period in 2023. Earnings per diluted share reached $1.89, exceeding last year’s result of $1.44 per share and the average forecast of analysts surveyed by LSEG for $1.84 per share.

Image source: Google Cloud

As reported, in the last quarter, revenue from the Google Cloud cloud division for the first time exceeded the $10 billion mark, amounting to $10.35 billion, which is an increase year-on-year by $2.32 billion or 29%. Also, Google Cloud’s operating profit exceeded $1 billion in the quarter for the first time, amounting to $1.17 billion, while a year earlier this figure was equal to $395 million.

Google CEO Sundar Pichai and CFO Ruth Porat noted that Google’s AI infrastructure and generative AI solutions for cloud clients have already brought in “billions” to the holding and are used by more than 2 million developers. According to Root, Alphabet’s capital expenditures for the second quarter totaled $13 billion, with a large amount of money invested in technology infrastructure – mainly in servers for the data center.

Image source: Google Cloud

Asked by analysts and investors about the justification for investing so much in AI infrastructure, Pichai said the risk of underinvesting is much higher than the risk of overinvesting: “Even in scenarios where we end up overinvesting, we are clear that this is infrastructure. which is very useful for us,” the Alphabet CEO assured the audience.

Last quarter, Google unveiled the sixth generation of its Trillium AI accelerator, which, according to Pichai, “delivers nearly five times the peak performance per chip while being 67% more energy efficient than TPU v5e.” Pichai also noted that NVIDIA Blackwell accelerators will appear on Google Cloud in early 2025.

Also during the reporting period, Google entered into a partnership with Oracle to share the Google Cloud Cross-Cloud Interconnect solution, which will make it easier for customers to run general-purpose workloads on both the Oracle and Google clouds without charging fees from one cloud to another. In September, the companies plan to launch the Oracle Database@Google Cloud project, within which Google will host the DBMS infrastructure in its data centers.