Alphabet to report Q2 earnings after the bell

Alphabet is set to report its second-quarter earnings after the bell Wednesday.

Here's what analysts polled by LSEG are expecting:

• Revenue: $94 billion
• Earnings per share: $2.18

Wall Street is also watching these numbers in the report:

• YouTube advertising revenue: $9.56 billion, according to StreetAccount
• Google Cloud revenue: $13.11 billion, according to StreetAccount
• Traffic acquisition costs (TAC): $14.18 billion, according to StreetAccount

Alphabet is among the megacaps expected to be a major driver of earnings growth during the second-quarter earnings season. Wall Street is anticipating the search giant to report a 10.9% increase in revenue and 15% growth in earnings per share.

Shares of Alphabet haven't moved much this year, lagging the other Magnificent Seven stocks and the S&P 500. Investors are primarily concerned about the rise of artificial intelligence chatbots, which could impact Google's ability to remain competitive in search.

During the second quarter, the search giant rolled out a number of new AI products.

At its annual Google I/O conference in May, Google announced a new subscription tier, called "Google AI Ultra," that offers access to the company's "cutting edge" AI features for $249.99 per month. Google also unveiled its return to the smart glasses market with a $150 million partnership with Warby Parker — the two companies said they plan to launch a series of smart glasses as soon as next year.

Google in May also announced a venture fund to invest in AI startups. As part of the "AI Futures Fund," eligible startups will receive Google investment, early access to AI models, and hands-on support from Google researchers, engineers and go-to-market specialists. They also get credits to use on Google Cloud.

Additionally in May, Google began testing the placement of its "AI Mode" product on its home page, directly beneath the Google search.

Earlier this month, OpenAI added Google to its list of suppliers, saying it expects to use the search company's cloud infrastructure for its popular ChatGPT service. The announcement represented a win for Google, whose cloud unit is younger and smaller than those of Amazon and Microsoft.

Google made a splash in the AI talent wars, announcing it would bring in Windsurf CEO Varun Mohan and other top researchers at the artificial intelligence coding startup as part of a $2.4 billion deal that also includes licensing the company's technology.

Internally, Google also made a number of personnel changes during the quarter.

The company added the new role of chief AI architect when it elevated Koray Kavukcuoglu from his position as Google DeepMind's chief technology officer in June.

Google also made more workforce reductions by offering buyouts to U.S.-based employees across several of its divisions, including search, ads and commerce.

Alphabet made several strides with Waymo, its self-driving car unit, during the quarter.

Waymo reached 100 million "real world, fully autonomous miles" driven on public roads, the company said last week. Waymo also announced expansions into new markets.

In June, Waymo announced plans to drive vehicles manually in New York, marking the first step toward potentially cracking the largest U.S. city. In July, the company said it will do limited testing in Philadelphia and it began offering accounts for teens ages 14 to 17, starting in Phoenix.

The company also endured some less-flattering optics during the quarter.

In June, Google's cloud suffered significant global outages knocking down or disrupting dozens of large internet services, including OpenAI and Shopify, among others.

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