Alphabet and NVIDIA Post Strong Q2 Results
Alphabet's cloud backlog reaches $514 billion while NVIDIA's revenue doubles to $96 billion, driving bullish outlooks for 2027.
Key points
- Alphabet's cloud backlog reached $514 billion in Q2, with cloud revenue accelerating to 82% growth.
- NVIDIA reported Q2 revenue of $96 billion and guides for 70% growth in fiscal 2028, citing supply constraints.
- NVIDIA's FY28 EPS consensus rose to $15.68 after 42 upward revisions, supporting a $350 price target.
Alphabet and NVIDIA reported significant second-quarter growth, with Alphabet's revenue rising 24% and NVIDIA's more than doubling to $96 billion. According to Yahoo Finance, these results underpin bullish views on their respective positions in the AI infrastructure market. Alphabet's cloud segment accelerated sharply, while NVIDIA cited strong demand for its latest hardware.
Alphabet's stock has gained nearly 40% over the last year, trading near $352. The company's cloud backlog stands at $514 billion, reflecting deep enterprise commitments. CEO Sundar Pichai described the current period as the early stages of a secular shift, noting that nearly 90% of Fortune 100 companies are now using Gemini Enterprise.
NVIDIA Revenue Doubles On Compute Demand
NVIDIA's second-quarter revenue reached $96 billion, marking a substantial increase from the previous period. The company guides for approximately 70% growth in fiscal 2028, attributing this to supply constraints rather than softening demand. Jensen Huang stated that AI has reached an inflection point where compute directly translates to revenue.
Analyst consensus for NVIDIA's fiscal 2028 earnings per share has surged to $15.68, up from $12.67 just three months ago due to 42 upward revisions. This adjustment reflects the market's reassessment of the company's ability to monetize its Vera Rubin architecture. The current valuation sits at roughly 22 times this revised earnings estimate.
Alphabet Cloud Backlog Hits Record High
Alphabet's cloud business posted an 82% revenue increase, significantly outpacing the overall company growth rate. The $514 billion backlog provides a clear visibility into future earnings, supporting the argument for higher price targets. With TPU system sales beginning to flow, the company is diversifying its hardware revenue streams beyond software services.
Valuation Metrics Reflect Growth Expectations
Wall Street's average price target for Alphabet stands at $422.34, while a more aggressive view places the stock at $500 based on 34 times fiscal 2027 earnings. NVIDIA's target of $350 implies a multiple of 22 times its fiscal 2028 consensus. These figures suggest that investors are willing to pay a premium for companies demonstrating tangible AI infrastructure adoption.
