Alphabet is facing increased scrutiny from investors as the delayed launch of Google’s flagship Gemini 3.5 Pro AI model raises questions about the company’s ability to turn massive investments in artificial intelligence infrastructure into sustained growth.
The Google parent is scheduled to report its second-quarter results on Wednesday, with investors closely watching the performance of its cloud business and the company’s outlook for AI spending. The earnings report comes as Alphabet continues to invest heavily in data centers, custom AI chips and other infrastructure needed to compete with OpenAI, Anthropic and other major AI developers.
Google had initially planned to launch Gemini 3.5 Pro in June. The model is designed to strengthen the company’s position in AI coding and agentic AI, areas where rivals have made significant advances. The delay has raised concerns among investors about whether Google’s latest AI systems are meeting internal performance expectations and whether the company is keeping pace with competitors.
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The timing is significant because Alphabet has sharply increased its spending on AI infrastructure. The company raised its 2026 capital expenditure guidance in April to between $180 billion and $190 billion and has announced plans to raise about $85 billion through equity offerings, including an investment from Berkshire Hathaway.
The scale of the investment has prompted a broader debate across the technology sector over whether companies are building AI capacity faster than demand can justify. Investors are increasingly seeking evidence that spending on data centers, chips and AI models will translate into higher revenue and profits.
Alphabet’s shares have fallen about 9% since late April, when the company reported a 63% increase in cloud sales, according to Reuters. The stock, however, remains nearly 13% higher for the year.
Analysts expect Alphabet’s second-quarter revenue to rise 21.3% year over year to $116.93 billion, according to LSEG data cited by Reuters. Google Cloud revenue is expected to grow about 64%, while advertising revenue is forecast to increase 13.7%.
The cloud business has benefited from demand for Google’s custom AI chips, including multibillion-dollar agreements involving Meta Platforms and Anthropic. The deals provide Alphabet with an additional source of AI-related revenue beyond its consumer-facing Gemini products.
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At the same time, Alphabet has faced the departure of several high-profile AI researchers and executives. Among them are Gemini co-lead Noam Shazeer and John Jumper, a Nobel laureate and key Google DeepMind executive who has moved to a rival.
Alphabet’s strongest advantage, analysts say, remains its broad ecosystem. The company controls a massive consumer distribution network through Google Search, YouTube and Android, while also operating a major cloud business and developing its own AI models and semiconductor technology.
The upcoming earnings report will therefore offer investors a closer look at whether Alphabet’s aggressive AI spending is producing measurable returns. The delayed Gemini 3.5 Pro launch could indicate how the company is navigating an increasingly competitive AI market.