Ticker Symbol: YOUANALYSTJul 26, 2026“Google's vertical integration across every AI stack layer justifies its massive capex, as Cloud revenue accelerates 82% and TPU sales begin.”
Why he says it — point by point
FAVORABLE & AGAINST · BOTH KEPTWhy
there's exactly one company that owns every single layer in its entire stack, even the web browser this whole story started with. And that company is Google.
Optimizations like these reduce the serving costs for Gemini by 78% last year alone
Gemini now powers 13 different products and services with over a billion users each.
Google Cloud revenue came in at $24.8 billion for the quarter, which is up 82% year-over-year.
This is the first quarter that Alphabet recognized revenues from selling their TPUs, meaning Google is directly selling their custom chips.
Google Cloud's backlog grew from $462 billion to $514 billion.
Google Cloud is growing faster than Microsoft Azure and Amazon Web Services put together.
Risk
Google spent $45 billion in the second quarter alone on land, buildings, chips, and cooling.
free cash flows came in at negative 5.9 billion dollars for the quarter.
Their long-term debt more than doubled in the last 6 months, and their interest bill basically 5X. the stock fell 7% the day after earnings.
if we strip out those paper gains out of their earnings, they actually had about $2.85 in earnings per share, which was actually below Wall Street's expectations.
The structured call
The receipt
Publish-day price $$319.74 · the claim is anchored to the moment it was said.