$Alphabet(GOOG)$ $Alphabet(GOOGL)$ $YIELDMAX GOOGL OPTION INCOME STRATEGY ETF(GOOY)$ 💥📊 Google’s Q2 Breakout: Full‑Stack AI Ramp‑Up, Capex Heaven & Aiming Beyond $200 📊💥

I’m fully convinced Alphabet just redefined the rules of the AI game; by dominating across Cloud, Search, Ads, and Infrastructure; all in one quarter. I’ve reviewed every chart, filing, analyst update, and options signal. The result? A high-conviction setup that’s not just about beating earnings; it’s about strategic AI supremacy, and I’m building a thesis around what comes next.

Earnings strength and segment dominance

Alphabet delivered $96.43 B in total revenue versus $94 B expected. EPS came in at $2.31, well above the $2.18 consensus. I saw strength across the board: Search hit $54.19 B (+12%), YouTube Ads $9.8 B (+13%), and Cloud jumped 32% to $13.62 B. Net income rose 19% to $28.2 B. These aren’t just beats; they’re signals of sustained momentum across all revenue pillars.

Google Cloud is finally a margin machine

I’ve tracked Google Cloud’s transformation for years, but this quarter is a tipping point. Operating income was $2.83 B, with margins up to 20.7%. Customer count grew 28% sequentially. For the first time, Cloud isn’t just growing; it’s scaling efficiently. The OpenAI partnership stunned the market. It’s not just symbolic; it validates Google’s infrastructure from a competitor’s perspective. That’s powerful.

Capex explosion reflects strategy, not recklessness

Alphabet hiked 2025 capex to $85 B, up from $75 B; a massive 60% YoY increase. Two-thirds of that is going into servers, the rest into data centers and networking. CFO Anat Ashkenazi warned that demand is still outpacing capacity, and 2026 capex will likely climb higher. The scale-up is aggressive, but I see it as strategic. It’s about control of the AI infrastructure layer, and Google’s vertical integration gives them an edge AWS and Azure are racing to match.

Macro context and tax tailwinds support the thesis

Despite rate volatility and inflation stickiness, Alphabet’s ad revenue still rose 10.4% to $71.34 B. The broader economic environment hasn’t slowed enterprise AI adoption or digital ad budgets. New tax legislation is adding to the tailwind. Alphabet is leveraging accelerated depreciation to shield cash flow. Analysts estimate the entire $10 B capex jump could be offset by tax credits. This isn’t a cost problem; it’s financial engineering that extends the AI runway.

Technical picture confirms breakout potential

The stock is trading near $194, just shy of the post-EPS high and major resistance at $197. Weekly charts show a rounded bottom with strong follow-through. RSI sits at 70.5; elevated, but not exhausted. This is breakout territory, not blow-off top. If there’s a clean move through $200, the $210–$216 region becomes the next probable range. The 20-week and 30-week MAs are sloping upward with widening Bollinger bands. That’s classic trend continuation.

Options flow supports bullish continuation

I watched $1.2 M in premium sweep into 29 Aug $200 calls, with volume of 2 404 and OI building fast. That’s not retail chasing; it’s structured institutional conviction. There’s also light bullish skew in the 205s and 210s across August. Net call premium flipped positive after earnings, even as the stock consolidated; bullish absorption under the hood.

Analyst conviction is building fast

Morgan Stanley raised their PT to $210, Citi to $225, Evercore ISI to $240, and Wedbush confirmed Alphabet as “the AI capex leader.” Bernstein’s note was blunt: “Google came back fighting this quarter.” Analyst focus has shifted from capex concerns to competitive moat expansion. Consensus is aligning with what I see in the charts and options: the risk isn’t overinvestment; it’s underestimating Alphabet’s AI leverage.

Watchlist and execution roadmap

I’m tracking several key developments that could drive the next leg higher:

• A confirmed breakout above $200 with volume strength

• Google Cloud contract announcements or new enterprise AI client adds

• Regulatory clarity, particularly around DOJ’s structural search remedies

• Next quarter’s margin and capex efficiency updates

• Additional TPU or GPU capacity expansion or wins over rivals

Why I’m building a forward thesis

Alphabet is now operating as a full-stack AI company. From foundational infrastructure (TPUs, data centers), to applied AI (Gemini, AI Mode), to monetization engines (Search, Ads, Cloud); it’s all integrated into a cohesive, scalable ecosystem. This is no longer a company dabbling in AI; this is a company reshaping its capex, partnerships, and product strategy to become the infrastructure layer of the next computing paradigm.

Cloud growth, ad resilience, OpenAI collaboration, technical breakout, analyst conviction, and options flow; these are not soft signals. They’re converging into a high-probability setup with institutional validation and long-term vision. If Alphabet clears $200 with strength, the risk-to-reward for follow-through into $210–$216 becomes incredibly compelling.

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