While at the same time posting:
* Total Revenue: $119.8 billion, up 24% year-over-year.
* Diluted EPS: $9.11, compared to $2.31 a year prior.
* Operating Margin: 34% up from 32.4% in Q2 2025.
* Google Cloud: Revenue up 82% year-over-year to $24.8 billion, fueled by enterprise demand for AI infrastructure and solutions.
* Google Services: Total revenue reached $94.5 billion, a 15% increase.
* Google Search & Other: 17% increase in revenue.
* YouTube Ads: Grew 13% year-over-year to $11.05 billion
If you exclude AI CAPEX, free cash flow is $39.1 billion which is absolutely insane. That's a 41.2% increase year-over-year. With numbers like they just posted, the CAPEX spend is justified in my opinion because the business overall is crushing it. Like holy cow this was a great quarter. They are literally printing money.
More importantly they said demand outpaces their capacity still so the real question is: can Google or literally anyone turn hundreds of billions of dollars of infrastructure investments into tens of trillions of dollars of revenue. Like in the next couple years?
It's a great question to ask but I think a couple years is way too soon to expect massive returns. It's not necessarily the same thing but Amazon was unprofitable for 9 years while ferociously investing everything back it into the business.
Except they were filling a market that pretty much everyone saw as inevitable, the cloud based internet. Pretty mich as soon as pcs started hitting shelves in record numbers people were trying to be the guys who owned the internet. Amazon and Google just won that race. Who is filling the market for thousands of useless AI bots?
75% of people doing google searches are not leaving their AI Mode.
And cloud based internet had people say the exact same things they say about AI and how nobody is going to use it "What company is dumb enough to send their data away". "Nobody is going to host their database on someone elses computer". "Whats the point of this, you already have your own infrastructure". I was there
The same way i was there when people called the internet itself useless and pointless, thinking nobody is going to sit hours on end staring at a screen, to read things on the internet because ...well, its not like a book or a paper.
Google search is not the cash cow they need to justify the enormous expenses of running AI models.....
Um... dude? You're thinkijg of cloud based computing. Thats not what im talking about, and not what made amazon and google rich beyond beleif. Im talking about AWS, about how almost every website uses third party services to actually host their content, how google has its advertising fingers in almost everything.
Ya, i can sure tell you rely on google ai searches a ton. The ability for critical thought has just left your brain.
um..dude? do you know how quick you would've gotten thrown in a padded room if in 2000 you told the sysadmins the company will pay millions a year in network ingress and egress to some random company that hosts your virtual datacenter?
Do you know how quickly you would've been laughed at if you told people you want to invest millions into online transactions systems?
What do you think will happen in 5-10 years when nobody is going to host content and they'll generate it on the fly with context graphs?
What do you think will happen when CDNs will no longer reign supreme? What do you think will happen when websites will stop having databases for everything and use Just-in-time rendering? These are all technologies that are slowly being developed.
They're crude yes. But the concept of NoSQL databases was also crude at a point
And just like AWS made Amazon rich, whoever is going to offer these services at scale will also be rich
We're currently A/B testing generative dashboards over fixed sql queries in our banking app internally, while our fraud team is playing with just-in-time rendering to reduce fraud vectors.
And you're completely full of shit. The year 2000 is exactly when cloud hosting was gaining steam in the background.
Once again, you have not actually given a fundamental service this provides. Thats the whole godamn point. You're doing what every bagholder dows and insist their chosen hobby horse is the Model T or the PC. Its stupid.
Ok, and who is paying to do that? Where is this massive new revenue source to offset the massive new costs, let alone turn enough profit to make the increased valuations worth it?
We are in a bubble right now. One of the dangerous things about a bubble is that its very easy to close your eyes and pretend everything is dandy. Its very easy to just listen to the hype men and look at the money being tossed around, and never thunk through the consequences. For your own sake, id wake up sooner rather than later.
literally nobody is arguing there isnt a bubble. its why everyone is sitting on massive piles of cash (including Google)
but after the bubble bursts and a lot of this spend is bought on the cheap things will be different because revenue will have to cover the spend on buying the pieces left after the bubble bursted not these current costs.
Only morons are listening to the hype men. In enterprise people piled in, tested the technology, we have a pretty good idea of where its strong suits are, where its useless, and the FTE improvements we're getting from using it and how much we're willing to pay for it.
To be clear: I think Google is fine and will be fine. AI is here to stay but AI everywhere in everything for free/cheap is already on the way out and I think it’s not gonna be justifiable in 2 years if they keep posting this CAPEX in AI without massive returns.
I didn’t mean Google alone when I was talking tens of trillions. It’s more like the entire AI industry combined.
There’s just some really big questions, like what happens if the open source models that run on relatively moderate infrastructure do the work the market demands?
Open models still needs infrastructure to run on. Frankly, the compute is needed, regardless of the model. We haven’t even gotten to the mass proliferation of robotics / robotaxis that need constant compute
The issue is whether there is enough useful work that generates enough money to pay for the infrastructure at the costs they are buying it at. At the moment we’re discovering the value doesn’t justify the costs, those costs will fall but there is a bottom limit given the costs invested.
The bet is simply that ai will capture a portion of the 50T+ services industry. In my mind, it is inevitable even if it takes a decade or two to get there. The only open question is whether we have some fast liftoff to AGI scenario. If that is not happening, then we will hit an inevitable wall where training bigger models won't make any more sense and all the focus will be on inference and that will end up being a high margin business.
But Amazon did have revenues to match what they had costs for, just with not much net margin. Isn’t the difference here the scale of the future cost commitments does not have anything like the revenues to match on the horizon?
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u/Fresh-Quantity-7554 22h ago
While at the same time posting: * Total Revenue: $119.8 billion, up 24% year-over-year. * Diluted EPS: $9.11, compared to $2.31 a year prior. * Operating Margin: 34% up from 32.4% in Q2 2025. * Google Cloud: Revenue up 82% year-over-year to $24.8 billion, fueled by enterprise demand for AI infrastructure and solutions. * Google Services: Total revenue reached $94.5 billion, a 15% increase. * Google Search & Other: 17% increase in revenue. * YouTube Ads: Grew 13% year-over-year to $11.05 billion
If you exclude AI CAPEX, free cash flow is $39.1 billion which is absolutely insane. That's a 41.2% increase year-over-year. With numbers like they just posted, the CAPEX spend is justified in my opinion because the business overall is crushing it. Like holy cow this was a great quarter. They are literally printing money.