Alphabet Stock Rises on Gemini Price Freeze Amid 35.6% Cloud Margin Scrutiny

Alphabet Inc.'s stock price rose by 1.7% after the company announced it would maintain prices for its Gemini product, a move that puts pressure on its 35.6% cloud margin.

The Gemini 3.8 Flash model, which is priced at $0.75 per million input tokens and $3.75 per million output tokens through December 31, was released with improved benchmark results while keeping the original pricing from the previous version.

Google Cloud's revenue surged by 82% to $24.77 billion in the June quarter, with its operating margin increasing to 35.6% from 20.7%. This move allows for flexibility in pricing to encourage adoption but does not serve as a strict indicator of profit from the model alone.

The company's AI investments are 'redefining what's possible' throughout its operations, according to Alphabet CEO Sundar Pichai. In the second quarter, Gemini models handled 22 billion API tokens per minute, and almost 90% of Fortune 100 firms adopted Gemini Enterprise.