What was Alphabet's Q2 2025 adjusted EPS?

Alphabet reported adjusted EPS of $9.11, beating the analyst estimate of $2.88.

Why did Alphabet stock fall despite strong earnings?

The stock fell because the company raised its capital expenditure guidance, raising concerns about AI spending.

What contributed to Alphabet's strong earnings?

Factors included unrealized gains of $6.26 per share from fair value changes in equity securities, as well as growth in advertising and cloud computing.

Alphabet Beats Q2 Estimates but Stock Falls on Capex Hike

Alphabet reported adjusted earnings of $9.11 per share for Q2 2025, well above the consensus estimate of $2.88 per share. However, shares fell after the company raised its capital expenditure forecast, raising concerns about AI-related costs.

Alphabet (GOOGL), the parent company of Google, reported strong second-quarter 2025 earnings after Wednesday's market close, significantly beating Wall Street expectations. Adjusted earnings came in at $9.11 per share, compared to the consensus estimate of $2.88 per share, according to FactSet. However, Alphabet shares declined in after-hours trading after the company raised its capital expenditure guidance.

Key Financial Results

Metric	Q2 2025	Analyst Estimates
Adjusted EPS	$9.11	$2.88
Fair value gain on equity securities	$6.26 per share	-

Highlights from the Report

Alphabet attributed the strong performance partly to unrealized gains of $6.26 per share from changes in the fair value of its equity securities. The company also cited continued growth in advertising and cloud computing businesses.

Forward Guidance

Alphabet raised its full-year capital expenditure forecast, indicating significant investments in AI infrastructure. This decision sparked investor concerns about the impact of rising costs on profit margins.

Impact on Stock

Alphabet shares fell as much as 5% in after-hours trading following the capex guidance raise. The decline reflects market worries that heavy AI investments could pressure future earnings.

What This Means for Investors

Despite the strong results, investors remain cautious about elevated capital spending levels. It remains to be seen whether Alphabet's AI investments will generate sustainable revenue growth or weigh on profitability.