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- 👉 Google Cloud’s Revenue Jumped +103%
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👉 Week in Review — Too Long; Didn’t Read:
Key Earnings Announcements:
Microsoft added 24 data centers across 5 continents during the quarter.
Alphabet’s backlog climbed to $561 billion.
Eli Lilly had 500K people fill a prescription from the Medicare GLP-1 Bridge Program since July.
Investor Events / Global Affairs:
Anthropic filed for its IPO with $16.3 billion in first-half revenue.
Apple unveiled its first touchscreen Mac.
Binance suffered a $6.3 billion hack, the largest in crypto history.
Economic Updates:
The Fed held rates at 3.75%-4.00% as two officials pushed for a hike.
GDP grew at a 3.4% annual rate as PCE inflation hit 3.6%.
Let’s dive right in!
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👉 Key Earnings Announcements:
Microsoft added 24 data centers across 5 continents during the quarter, Alphabet’s backlog climbed to $561 billion, Eli Lilly had 500K people fill a prescription from the Medicare GLP-1 Bridge Program since July.
Microsoft (MSFT)
Key Metrics
Revenue: $92.3 billion, an increase of +19% YoY
Operating Income: $45.9 billion, an increase of +21% YoY
Profits: $36.6 billion, an increase of +32% YoY
Earnings Release Callout
“We are delivering greater capability, choice, control, and cost efficiency for customers across our entire stack. By helping organizations build and own their own intelligence, and earning trust through agent safety and security, we are translating our innovation into growing adoption and real-world impact across every industry.”
My Takeaway
Microsoft reported another strong quarter as accelerating demand across Azure, Microsoft 365 and its broader AI platform pushed revenue higher. Microsoft Cloud revenue increased 30% YoY to $63.9 billion, while commercial remaining performance obligations skyrocketed 73%.
Agents and Infra remained the overwhelming growth engine, generating $76.8 billion in revenue, an increase of 25% YoY. Azure revenue climbed 48%, while Microsoft 365 Commercial Cloud increased 17%. Foundry also continued scaling rapidly, surpassing 120,000 customers as revenue more than tripled YoY, while the number of customers building multi-model agentic solutions increased fivefold.
Devices and Consumer revenue declined 3% to $15.5 billion. Search and advertising revenue increased 12%, while Xbox content and services revenue declined 2% and Windows OEM and Devices revenue fell 22%. Management attributed much of the Windows weakness to elevated channel inventory, softer PC demand and a difficult comparison following last year's Windows 10 end-of-support cycle.
Management focused heavily on the gap between AI demand and available infrastructure. Microsoft added 24 new data centers across five continents during the quarter, while improving utilization across its existing CPU and GPU fleet helped Azure outperform expectations. The company has also begun receiving NVIDIA Vera Rubin GPUs and continues scaling its own Maia accelerators, but management said customer demand still exceeds available supply.
Looking ahead, management expects next quarter revenue between $96 billion and $97 billion, representing 18% growth. Azure revenue is expected to increase 49% in constant currency, while Agents and Infra revenue is expected between $80.1 billion and $80.7 billion. Microsoft also expects more than $50.0 billion of capital expenditures next quarter as it continues aggressively expanding AI and cloud capacity.
Long MSFT.
Alphabet (GOOGL)
Key Metrics
Revenue: $127.6 billion, an increase of +25% YoY
Operating Income: $40.6 billion, an increase of +30% YoY
Profits: $26.2 billion, compared to $34.98 billion last year
Earnings Release Callout
“2026 is off to a terrific start. Our AI investments and full stack approach are lighting up every part of the business. Search had a strong quarter with AI experiences driving usage, queries at an all time high, and 19% revenue growth. Google Cloud revenues grew 63% with backlog nearly doubling quarter on quarter to over $460 billion. This was our strongest quarter ever for our consumer AI plans, driven by the Gemini App.
Overall the number of paid subscriptions has now reached 350 million, with YouTube and Google One being the key drivers. Gemini Enterprise has great momentum with 40% quarter on quarter growth in paid monthly active users. And, finally, I’m pleased to see Waymo surpass 500,000 fully autonomous rides a week.
These outstanding results are built on our differentiated, full stack approach. Our first-party models, like Gemini, are now processing more than 16 billion tokens per minute via direct API use by our customers, up 60% from last quarter. It’s really exciting to see how our AI investments are delivering value for our users, customers and business.”
My Takeaway
Google Services revenue increased 11%. Search & Other remained the largest contributor, growing 12% — as overall Search query growth reached its highest rate in five years. YouTube advertising revenue increased 9%, while Subscriptions, Platforms and Devices grew 11%.
Google Cloud was the standout, with revenue skyrocketing 103% to $30.7 billion behind strong demand for AI infrastructure, AI solutions, core GCP services and TPU systems. Cloud operating income more than tripled to $11.1 billion, pushing operating margin to 36%, while backlog reached $561 billion. Management expects just over 55% of that backlog to convert into revenue during the next two years.
Management emphasized that Alphabet's AI investments are now driving growth across both its existing businesses and newer products. The Gemini app surpassed one billion users, while Google's first-party model APIs are processing nearly 32 billion tokens per minute, more than four times last year's rate. Management also noted that AI-powered Search is encouraging users to ask longer and more complex questions, with the majority of AI Mode queries representing incremental searches rather than replacing traditional Search activity.
Looking ahead, management expects tougher Search comparisons and foreign-exchange headwinds to pressure fourth-quarter growth, while TPU system sales are expected to continue scaling within Google Cloud. Management maintained their full-year capital expenditure outlook between $195 billion and $205 billion and expects capital spending to increase significantly again in 2027 as it expands AI and cloud capacity.
Long GOOGL.
Eli Lilly (LLY)
Key Metrics
Revenue: $24.4 billion, an increase of +39% YoY
Operating Income: $8.6 billion, an increase of +17% YoY
Profits: $6.5 billion, an increase of +16% YoY
Earnings Release Callout
“Lilly had another strong quarter, exceeding our prior expectations and allowing us to raise our full-year outlook. Revenue growth was driven by broad global consumer demand for Mounjaro and Zepbound, the global launches of Foundayo, expanded U.S. coverage for obesity care and a doubling in our newest products in oncology, immunology and neuroscience. To drive durable long-term growth, we continue to invest in our drug-making and technology capabilities, with multiple business development deals and partnerships signed and closed, and with new manufacturing expansions in Texas and Virginia. Lilly is executing well across the value chain, and our potential for impact on human health continues to expand."
My Takeaway
Eli Lilly reported another massive quarter as continued global demand for Mounjaro and Zepbound pushed revenue up 39% YoY. Volume increased 53%, partially offset by a 15% decline in realized prices.
Mounjaro remained the largest growth engine, with worldwide revenue increasing 65% to $10.7 billion. Zepbound revenue increased 49% to $5.4 billion as obesity demand continued to expand. Importantly, growth is also broadening beyond incretins, with Lilly's newer oncology, immunology and neuroscience products collectively doubling YoY.
Management highlighted improving access as another meaningful driver of the obesity franchise. Lilly's participation in the Medicare GLP-1 Bridge Program expanded access to obesity medicines for approximately 20 million U.S. seniors, with more than 500,000 people filling a Lilly prescription through the program since its July launch. The company also continued the international rollout of Foundayo, its oral GLP-1, while preparing for additional regulatory decisions and indications.
The pipeline remains another major source of potential growth. Retatrutide recently delivered more than double the weight loss of the highest approved dose of Ozempic in a head-to-head Phase 3 diabetes trial, while Lilly continues advancing additional next-generation obesity treatments. Management is simultaneously investing heavily in manufacturing capacity, including new $6.5 billion and $5.0 billion facilities in Texas and Virginia.
Looking ahead, management raised full-year revenue guidance to between $91 billion and $92 billion, up substantially from its previous range of $85 billion to $87 billion. Lilly also increased its performance-margin outlook to 52.0%, while adjusted EPS guidance now sits between $35.00 and $36.00.
Long LLY.
👉 Investor Events / Global Affairs:
Anthropic filed for its IPO with $16.3 billion in first-half revenue, Apple unveiled its first touchscreen Mac, Binance suffered a $6.3 billion hack, the largest in crypto history.
Anthropic Filed for Its IPO With $16.3 Billion in First-Half Revenue
Samuel Boivin | Nurphoto | Getty Images
Anthropic filed its S-1 with the SEC on Monday, giving investors the most detailed look yet at how a pure-play AI lab makes its money. Anthropic booked $16.3 billion in revenue in the first half of 2026, up from $1.2 billion in the first half of 2025, with an implied gross margin of 85% and an adjusted operating margin of 10%. The company also had $112.4 billion in cash plus $19.3 billion held in securities.
Growth is slowing from a blistering pace, with revenue up roughly 144% in the second quarter from the first and about 47% in the third quarter. Anthropic’s net loss for the first half was $80.7 billion, including a $72.4 billion non-cash loss tied to its convertible notes and other instruments. Seven co-founders, including CEO Dario Amodei, hold a single Class F share with 50.1% of the total voting power, and analyst estimates for the IPO valuation range from $1 trillion to $2 trillion.
“The anti-AI movement has described [Anthropic] as a business that destroys value with every … AI query, and that’s just not true.”
Apple Unveiled Its First Touchscreen Mac
Frederic J. Brown | AFP | Getty Images
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