Meta (NASDAQ: META | META Price Prediction) and Alphabet (NASDAQ: GOOGL) both delivered Q2 2026 reports that should have made value hunters look twice.
Alphabet (GOOG) is rated a Buy, driven by robust ecosystem integration, and sustained cash flow generation. GOOG's Search business posted 17% YoY growth, Google Cloud surged 82% YoY with a $514B backlog, and YouTube ads rose 13% YoY. YouTube's ecosystem leverages AI, creator monetization, and cross-platform integration, fueling multi-industry disruption and a widening competitive moat.
Alphabet's early bet on SpaceX has multiplied more than 100-fold, with the Google parent disclosing a stake worth about $94 billion at the end of June compared with the $900 million investment it said it made in Elon Musk's rocket company in 2015.
Alphabet's 19% pullback reflects surging AI spending and cash-flow pressure, even as Cloud growth and a $514 billion backlog signal strong demand.
Berkshire Hathaway Inc. recently increased their position in GOOGL significantly over the last quarter, indicating a strong value proposition. GOOGL's cloud services are already shoing high demand and supporting high revenue growth. GOOGL's fundamentals remain strong despite the increased capex including 60% gross margins and double digit returns on investments.
Prediction market punters have all but written off a Google Gemini Pro release this week, with odds on a launch by 14 August collapsing 46 percentage points to 4%. The Polymarket contract, which has drawn just under $1 million in volume, resolves yes only if Google makes its next Pro-tier model available to the general public.
Jeff Dean left Google last week to start Discovery Loop, a new AI company. He has been in talks to raise $1 billion dollars at around a $10 billion valuation for his new AI startup, sources say.
For the 451 S&P 500 companies that have reported Q2 results, aggregate earnings have grown +41.6% YoY on +14.7% higher revenues. Positive surprises are also widespread, with 83.4% beating EPS estimates and 76.5% topping revenue estimates.
Based on key yardsticks, Waymo, the driverless car division of Google, has a large lead in the sector.
Google held its Made by Google 2026 event on Wednesday, unveiling the Pixel 11 series, the Pixel Watch 5, and even a competitor to Apple's AirTag. The tech giant also used the event to show off new Gemini-powered features across its devices.
For the last few years, Google's Pixel has been a showcase of new AI features, with few hardware changes from the previous year's devices. Similarly, the Pixel 11 series isn't too different in design and internals from its predecessor.
At its Made by Google event on Wednesday, Google unveiled the Pixel Watch 5 with a smarter Gemini experience, as well as advanced fitness and health monitoring. The new smartwatch, which starts at $399, can track blood pressure patterns and insulin resistance, as well as deliver personalized help and better sleep tracking.