Alphabet Stock (GOOGL) Jumps as Report Reveals New "Frozen v2" AI Chip ahead of Q2 Earnings
Complete. Here is the key summaryAlphabet (GOOGL) shares rose 3% following reports of a new 'Frozen v2' AI chip designed to enhance Gemini model efficiency by hard-wiring key operations into silicon. Targeting 2028 deployment, the specialized chip aims to address internal AI compute shortages and power constraints. This news precedes Alphabet's Q2 earnings call on July 22, where analysts expect adjusted EPS of $2.88 and revenue of $117 billion, driven by strong advertising and cloud growth.
Alphabet (GOOGL) shares rose about 3% on Monday after The Information reported that Google is building a new server chip called "Frozen v2" to make Gemini models faster and more efficient. The company is targeting 2028 for deployment. The news comes just ahead of the tech giant's Q2 earnings call on July 22.
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Frozen v2 is designed with a different approach than Google's general‑purpose TPUs. Instead of running all Gemini operations in software, the chip would hard‑wire key parts of the model directly into the silicon. This would allow it to process queries with fewer steps and less data movement, improving speed and power efficiency.
In a statement to CNBC, Alphabet said its teams are "constantly researching and experimenting with innovations" to improve performance and efficiency. The company added that not every project moves into production, but this kind of exploration is key to its full stack hardware-software approach.
Engineers working on Frozen v2 reportedly expect it to deliver six to ten times more tokens per unit of power than Google's newest TPUs. The chip is not meant to replace TPUs, rather, it works alongside them as a more specialized option for Gemini workloads.
However, Frozen v2 would only work with future Gemini models if Google keeps the same underlying architecture. The report said Google views the chip as a trial run and does not plan to manufacture it at TPU‑level scale.
Why Google Is Building Frozen v2
Google is pushing ahead with Frozen v2 because it is running into a serious shortage of internal AI compute. The company does not have enough power to train and run its largest models, which has caused friction inside teams and even forced Google Cloud to turn away some big enterprise deals.
At the same time, power demands are exploding. Data center capacity is tight globally, and energy costs keep rising. That makes extreme hardware‑level efficiency one of the biggest barriers to scaling AI. By hardwiring parts of Gemini into the chip itself, Google aims to cut power use and stretch its limited compute much further.
What to Expect from GOOGL's Q2 Earnings
The Street expects Alphabet to post adjusted earnings per share (EPS) of $2.88, up 24.7% from $2.31 a year ago. Also, revenue is forecast to rise 21.3% year-over-year to $117.00 billion.
The company's Q2 results will likely show strength in its core advertising business, as marketers spend more on Search and YouTube. Investors will also look for signs Google Cloud is still improving after several strong quarters. Any lift in enterprise AI demand could help Cloud post another solid quarter.
Are GOOGL Shares a Good Buy?
Overall, GOOGL has a Strong Buy consensus rating on TipRanks, based on 29 Buys and five Hold ratings. The average Alphabet price target of $437.79 implies 24.03% upside potential from current levels.