Alphabet poised for Q2 earnings on July 22 as AI boosts cloud, search

Alphabet, the parent company of Google, has delivered triple-digit stock gains over the past three years, fueled by both its established core businesses and the AI boom. The company's foundation rests on Google Search, which commands more than 90% market share globally. Advertising across the Google platform generates the company's largest revenue stream.

In the latest quarter, Google advertising revenue reached more than $77 billion（約12兆円）, representing 70% of total revenue and climbing 15% year-over-year. This advertising engine benefits from AI improvements in Google Search, which have driven query volume to record levels. Alphabet developed Gemini, its own large language model, which now powers Google Search, serves as an AI assistant to Google users, and supports Google Cloud customers. Gemini has made significant market share progress: it currently holds 27.7% of the market as the second most-used AI assistant, trailing ChatGPT at 46.4%, according to Sensor Tower's State of AI Report for 2026 as cited by TechCrunch. ChatGPT's market share fell below 50% for the first time recently.

Google Cloud has emerged as a major growth engine, particularly with AI acceleration. In the first quarter, cloud revenue soared more than 60% to $20 billion（約3.2兆円）, and backlog nearly doubled from the previous quarter to more than $400 billion（約64兆円）. Alphabet identified AI solutions as the biggest driver of cloud revenue in the quarter. This growth trajectory reflects sustained demand in the AI sector—a dynamic reinforced by peer signals: chip equipment maker ASML raised its annual sales forecast for a second time in 2024 on strong AI chip demand.

Alphabet is scheduled to report second-quarter earnings after the closing bell on July 22. The article characterizes the stock as a solid buy candidate, noting that while Alphabet is not the cheapest among peer tech stocks, it trades at 25x forward earnings—described as a reasonable valuation. The article frames Alphabet as suitable for both cautious and aggressive investors: its pre-AI business in search and cloud is strong and successful in its own right, while AI represents an additional long-term growth opportunity. The article concludes that investors need not rush to buy before the July 22 report, as short-term price movements have limited impact on long-term returns.

Alphabet's strength rests on two pillars that the article describes: a mature, dominant search and advertising business, and an AI-driven expansion in cloud services. Google Search commands more than 90% market share in search, and the latest quarter showed advertising revenue of more than $77 billion（約12兆円）—70% of total revenue—climbing 15% year-over-year. This resilience in the core business provides a foundation independent of AI trends.

The second pillar is acceleration driven by AI. Gemini, Alphabet's large language model, now powers Google Search, serves as an assistant to Google users, and supports Google Cloud customers. Its 27.7% market share as the world's second most-used AI assistant marks meaningful progress, even as ChatGPT retains the lead at 46.4%. Critically, the article states that AI integration in search pushed queries to record levels in the recent quarter. Google Cloud's revenue surge of more than 60% to $20 billion（約3.2兆円）, with backlog nearly doubling to more than $400 billion（約64兆円）, has been driven primarily by AI solutions demand, suggesting this growth may be sustained.

The July 22 earnings report is positioned as a near-term catalyst. Peer signals—specifically ASML's second forecast raise this year on high AI chip demand—indicate the AI sector may be sustaining momentum into the second quarter. At 25x forward earnings, the article characterizes Alphabet's valuation as reasonable, offering what it calls a "solid entry point" without requiring investors to rush before the earnings date.