Will Anthropic Boost Alphabet’s Earnings to the Stratosphere?

Investors are watching Alphabet (NASDAQ:GOOG | GOOG Price Prediction) ahead of its Q2 2026 results due Wednesday, July 22, after the bell. With shares near $355 and Anthropic’s valuation exploding, this report could scramble how investors read the numbers.

An Anthropic Windfall Waiting to Land

Last quarter set a high bar. Alphabet posted an EPS beat of 94.1%, with $5.11 versus $2.63 expected, while revenue climbed 21.79% YoY to $109.9 billion. Google Cloud grew 63% to $20 billion, and backlog nearly doubled to $462 billion.

Since then, the story has taken an even bigger turn. Alphabet holds roughly 14% of Anthropic, a stake worth approximately $135 billion at Anthropic’s latest $965 billion valuation. At the end of Q1, Anthropic was marked at $380 billion. Bank of America estimates the markup will drive roughly $80 billion in unrealized gains this quarter, prompting the firm to forecast EPS of $8.38, well above the Street.

Consensus Estimates

Look Past the Anthropic Mark to the Real Business

I’ll be reading right past the headline EPS. A markup this large is a one-off accounting event, and investors still need to treat it that way, since it otherwise won’t give a clear picture of how the underlying business is performing. The real signal sits in Google Cloud, where Anthropic is a major TPU customer.

You should watch three things. First, cloud growth. Last quarter’s 63% YoY print came with CFO Anat Ashkenazi admitting “our cloud revenue would have been higher if we were able to meet the demand”. Any acceleration off the $20 billion base tells you TPU capacity is catching up.

Second, backlog. The $462 billion cloud backlog nearly doubled QoQ, and management expects just over 50% to convert to revenue within 24 months. Another leap would confirm the AI infrastructure thesis.

Third, capex discipline. Alphabet already raised 2026 capex to $180 to $190 billion and flagged 2027 will “significantly increase”. Free cash flow fell 46.63% YoY in Q1. Another downdraft could pressure the stock even with a blowout headline.

Search matters too. AI Overviews drove 19% Search growth last quarter, and any deceleration would revive competitive fears.

A Print That Needs a Translator

This quarter will hand Alphabet a spectacular headline number thanks to Anthropic, and a possible October Anthropic IPO could push the valuation higher still. But the market has already seen this movie. Prediction markets assign a 97.4% probability of a beat. What will actually move the stock is whether cloud growth reaccelerates and capex stays productive. That is the report inside the report.

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