Google’s cloud revenue surges 82% as Meta’s AI costs cut margins
Alphabet and Meta both spent tens of billions on AI data centers in the second quarter, but only Google saw a direct return from customers. Google Cloud revenue hit $24.77 billion, up 82% year-over-year, driven by demand for AI-powered services. Nearly 90% of Fortune 100 companies use Gemini Enterprise, and AI features boosted Search traffic by 17%, helping Google’s operating margin expand to…
Key points
- Google Cloud revenue hit **$24.77 billion**, up **82%** year-over-year, driven by AI demand and Gemini Enterprise adoption
- Meta’s ad revenue grew **14%** in impressions and **12%** in pricing, but expenses rose **55%** to **$42.03 billion**
- Google’s operating margin expanded to **34%**, while Meta’s fell to **31%** from **43%** due to higher costs
Meta, meanwhile, saw its ad-driven revenue grow 14% in impressions and 12% in ad pricing, but expenses rose 55% to $42.03 billion, including $2.40 billion in legal charges and $1.18 billion in severance. Meta’s CEO, Mark Zuckerberg, called selling AI APIs and compute to third parties a ‘new muscle,’ but the company remains ‘demand constrained’ for compute. Long-term debt rose from $46.5 billion to $98.2 billion, and Google’s CFO noted buybacks are paused. Meta’s $130 billion to $145 billion capex plan for 2026 hinges on future returns, while Google’s cloud growth must outpace its nearly fivefold increase in interest expense to justify its spending.
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247wallst.com · 27 September 2026
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