Alphabet's AI-Driven Cloud Backlog Surpasses $514 Billion, Outpacing GDPs of Major Countries
Google-parent Alphabet Inc. reported a strong second-quarter performance in 2026 with revenue rising to $119.8 billion and profit surging to $112.1 billion. The company's cloud division saw significant growth driven by AI infrastructure demand, resulting in an expanded backlog of contracted work reaching $514 billion—surpassing the GDPs of countries like South Africa, Denmark, and Bangladesh. The cloud segment generated $24.8 billion for the quarter with operating income tripling to $8.8 billion at a 35.6% margin. CEO Sundar Pichai highlighted widespread adoption of Gemini Enterprise among Fortune 100 companies as a key driver. However, capital expenditures more than doubled year-over-year and free cash flow turned negative due to increased spending on AI infrastructure. Despite the earnings beat, Alphabet's stock declined in after-hours trading following an upward revision of full-year capex guidance to $195 billion–$205 billion.