Principal Analyst | Strategic Advisor | Mentor - Application Platforms, Developer Services
Alphabet Inc. just posted its Q2 results and outlook for the remainder of the year. There is a lot to unpack here, and I think that my colleagues will have their own assessments. So, I will keep my comments specific to the Google Cloud division which aligns with my areas of research. If you want to hear or see more about other parts of the business please check out Anshel Sag, Matthew Kimball and Patrick Moorhead . POSITIVES 1) Financially, Google Cloud hit two major milestones $10B in quarterly revenue and $1.2 B in profit contribution. That's a bit north of 20% of total revenue for the quarter. 2) AI is a driver for Cloud with the majority of it's top 100 customers using AI capabilities. There was also a mention of over 2M developers using Google AI 3) Despite a strong emphasis on its own Gemini models, Google is continuing to expand its offers through partnerships with other AI and enterprise players. OPEN QUESTIONS 1) Spending looks to remaining flattish in terms of Head Count and CAP/EX. It seems like there may be some lag in terms of the market catching up to what has been an aggressive build up the past few years. However, it might also be a sign that new technology (chips and models) is more efficient. 2) When asked about areas of fastest AI growth and slower AI growth. CEO Sundar Pichai indicated that search and consumers had faster growth. And enterprise use was slower. Since Alphabet serves both areas that's good. But, it does beg the question about what we may hear from other enterprise only vendors. We shall see.
