(Reuters) – Alphabet published a quarterly turnover higher than Wall Street on Wednesday, citing high demand for its dematerialized computer services (“Cloud”) and declaring that it has revised upwards, at around 85 billion dollars, its investment spending plans.

These results are the background of commissioning of new features fueled by artificial intelligence (AI) and stability of the online advertising market.

Sales of the Google “Cloud” division, of which Alphabet is the parent company, increased by almost 32% over the period April-June, while the consensus was +26.5%.

Above all, the initiates were surprised by the increase in investment expenses.

“No one anticipated only the target of $ 75 billion in capital expenditure in 2025 would be changed,” said Dave Wagner, portfolio manager at Aptus Capital Advisors.

“Google achieved an excellent quarter. It easily beat (expectations), and was overshadowed by this 10 billion dollars of investment expenditure,” he said.

As well as other technological giants, Google invests massively in AI. In the past, the group had expressed its intention to spend about $ 75 billion in capital. It is expected that the investments of American “tech” in infrastructure for AI total more than 320 billion dollars this year.

The enthusiasm around AI has fed demand for cloud services.

“With this strong and growing demand for our Cloud products and services, we are strengthening our investment in capital spending,” said Alphabet Director of Alphabet, Sundar Pichai, in a press release accompanying the publication of the group’s quarterly results.

If Google is still preceded in terms of “cloud” sales by AWS from Amazon and Azure from Microsoft, it has multiplied AI offers to win lucrative contracts with companies. OPENAI, the chatgpt publisher, recently added Google Cloud to its supplier list, as reported last month by Reuters.

The fact remains that, according to Jesse Cohen, analyst for Investing.com, the increase in investment expenditure is accompanied by additional concerns with regard to alphabet costs and its short -term profitability.

In a context of frustration of investors, who want faster benefits, American technological giants have presented their massive investments as necessary in the face of increased competition from their Chinese rivals.

Alphabet reported a total turnover of $ 96.43 billion in the second quarter on Wednesday, against a consensus of around $ 94 billion according to LSEG data.

The group’s benefit over the April-June period established $ 2.31 per share, while analysts anticipated an amount of $ 2.18 per share from LSEG data on average.

Google’s advertising sales, which represent approximately 75% of overall turnover, increased by 10.4% to $ 71.34 billion, beating consensus (69.47 billion according to LSEG data).

(Deborah Sophia in Bangalore and Kenrick Cai in San Francisco; Jean Terzian)

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