*

Reports total revenue of $96.43 billion for second quarter

vs.

expected $94 billion

*

Raises 2025 capital spending target to about $85 billion

from

$75 billion

*

Big Tech spending on AI amid rising Chinese competition

July 23 (Reuters) - Alphabet beat Wall Street

estimates for its second quarter on Wednesday, and cited massive

demand for its cloud computing services as it hiked its capital

spending plans for the year to about $85 billion.

The search giant beat estimates for quarterly revenue and

profit on the back of new AI features and a steady digital

advertising market. Google Cloud's revenue growth surged nearly

32%, well above estimates for a 26.5% increase.

"With this strong and growing demand for our Cloud products

and services, we are increasing our investment in capital

expenditures." CEO Sundar Pichai said in an earnings release.

Shares of the company, which have risen more than 18% since

its previous earnings report in April, were down 1% in extended

trading.

Google had earlier pledged about $75 billion in capital

spending this year, part of the more than $320 billion that Big

Tech is expected to pour into building AI capabilities.

The companies have defended their aggressive AI spending

amid rising competition from Chinese rivals and investor

frustration with slower-than-expected payoffs, saying those

massive investments are necessary to fuel growth and improve

their products.

Alphabet reported total revenue of $96.43 billion for the

second quarter ended June 30, compared with analysts' average

estimate of about $94 billion, according to data compiled by

LSEG.

Google's advertising revenue, which represents about

three-quarters of the tech major's overall sales, rose 10.4% to

$71.34 billion in the second quarter, beating expectations for

$69.47 billion, according to data from LSEG.