Online advertising giant Alphabet (NASDAQ: GOOGL) reported Q2 CY2026 results exceeding the market’s revenue expectations, with sales up 24.2% year on year to $119.8 billion. Its GAAP profit of $9.11 per share was significantly above analysts’ consensus estimates.

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Revenue Growth

Alphabet shows that fast growth and massive scale can coexist despite conventional wisdom. The company’s revenue base of $220.3 billion five years ago has doubled to $445.9 billion in the last year, translating into an incredible 15.1% annualized growth rate.

Alphabet’s growth over the same period was also higher than its big tech peers, Amazon (11.7%), Microsoft (14.7%), and Apple (6.1%). This is an important consideration because investors often use the comparisons as a starting point for their valuations. With these benchmarks in mind, we think Alphabet is a bit expensive (but still worth owning).

Long-term growth reigns supreme in fundamentals, but for big tech companies, a half-decade historical view may miss emerging trends in AI. Alphabet’s annualized revenue growth of 16.5% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Alphabet reported robust year-on-year revenue growth of 24.2%, and its $119.8 billion of revenue topped Wall Street estimates by 2.2%. Looking ahead, sell-side This projection is admirable for a company of its scale and illustrates the market sees it as a beneficiary of the AI trend rather than a victim.

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Google Search: Alphabet’s Bread-and-Butter

The most topical question surrounding Alphabet today is: “Will new Generative-AI products like ChatGPT and Meta AI disrupt Google Search and its 80%+ market share?”.

Although OpenAI (creator of ChatGPT) doesn’t disclose its financials, we can gain further insight by comparing Google Search to Meta. Meta essentially has a monopoly in social media advertising and is creeping into search with Meta AI, which is powered by its Llama large language model.

Starting with Alphabet, Google Search is by far the most considerable portion of its revenue at 54.6%, and it grew at a 12.8% annualized rate over the last five years, slower than total revenue. It accelerated in recent years, however, growing 14.2% annually over the last two years.

On the other hand, its two-year result was lower than Meta’s 23%, showing digital advertising dollars could be flowing to Meta because of its improved AI algorithms and targeting capabilities. Alphabet bulls would argue this trend could reverse because the return on investment from keyword-driven advertising is more tangible, but that hasn’t been the case lately.

Quarterly performance is particularly relevant for Alphabet because it captures the growth of AI and signals whether investors are overestimating its competitive impact. Google Search revenue recorded a hearty year-on-year increase of 16.8% in Q2.

Key Takeaways from Alphabet’s Q2 Results

Alphabet beat revenue estimates. While EPS beat by a large amount, this was largely due to gains on equity securities rather than performance of the core business. The stock was roughly flat immediately following the results.

So do we think Alphabet is an attractive buy at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).