<p>After the U.S. stock market closed on Tuesday, Google's parent company Alphabet released better-than-expected performance, with strong performance in cloud services and search business, and AI assisting in Q2 cloud revenue exceeding $10 billion for the first time.</p><p>Subsequently, Google held an earnings conference call, where company executives updated investors on the latest developments in AI investments, future prospects, and more. Here are the key points from the call:</p><h2>1. The Risk of &#34;Underinvestment&#34; in AI Far Greater Than &#34;Overinvestment&#34;</h2><p>During the call, Google CEO Sundar Pichai emphasized that for Alphabet, the risk of underinvestment in the field of AI is far greater than the risk of overinvestment.</p><p>He pointed out that even in cases of overinvestment, the current investments in infrastructure such as data centers can be repurposed for other tasks, whereas not maintaining a leading position in the AI competition would have more serious negative consequences for the company.</p><h2>2. AI-Driven Search Improvements Increase Search Usage and User Satisfaction</h2><p>Google stated that the AI-powered overview tool it introduced has been effective, summarizing content at the top of search pages, increasing search usage and user satisfaction, particularly attracting more younger users. Pichai mentioned that AI not only expands the types of queries Google can handle but also opens up powerful new ways for search.</p><h2>3. AI Products Boost Cloud Business Growth</h2><p>Generative AI products have added new growth momentum to Google's cloud business. Google CFO Ruth Porat stated that most of the top 100 customers of Google Cloud are using Alphabet's generative AI solutions. The profit margin of Google Cloud improved in the second quarter, reflecting the department's revenue strength and the company's efficiency enhancements.</p><h2>4. Operating Profit Margin Expected to Be Higher in FY 2024 Than Last Year, But Q3 May Lag Behind</h2><p>CFO Ruth Porat mentioned that the company expects the full-year operating profit margin for FY 2024 to be higher than in 2023, but the third quarter may be negatively impacted by depreciation and higher expenses, partly due to increased AI investments, and the release of the new generation of Pixel phones will also raise expenses.</p><p>Porat also revealed that capital expenditures in the second quarter reached $13 billion, and it is expected that quarterly expenditures for the remainder of 2024 will remain around $12 billion.</p><p>Following the earnings conference call, Alphabet's stock price fell over 2% in after-hours trading, currently trading at $183.6.</p><p><img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/e203950b-b2f1-422a-967b-f959d24d4177.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/e203950b-b2f1-422a-967b-f959d24d4177.png"/></p>

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<p>Google expects its operating profit margin to be higher than last year in the 2024 fiscal year, but the third quarter may be affected by depreciation and high expenses</p>

- Alphabet's parent company, Google, exceeded expectations with strong performances in cloud services and search business post-market on Tuesday. AI played a key role in surpassing $10 billion in Q2 cloud revenue.
- During the earnings call, Google executives updated investors on the company's latest developments in AI investments and future prospects. Key points included the emphasis on the risk of "underinvestment" in AI being greater than the risk of "overinvestment."
- AI-driven improvements in search functionality boosted user satisfaction and engagement, while AI products contributed to the growth of Google's cloud business, reflecting increased profitability in the cloud sector.

Four key points of Google's conference call: AI "underinvestment" risk far outweighs "overinvestment" risk