Shares of Alphabet (GOOGL) - Get Report were down 2.7% to $971.60 in morning trading on Tuesday, the day after the tech giant posted its second quarter financial report. 

For the past quarter, Alphabet reported earnings of $5.01 per share, topping expectations for $4.49 per share. Revenue jumped 21% from the year ago period to $26.01 billion, also beating Wall Street's estimates for $25.6 billion. 

However, profits dropped 27.7% year-over-year due to the European Commission slapping it with a $2.74 billion antitrust charge, the largest fine it has ever handed out. The EC said in June that Google was favoring its own shopping services over competitors. In addition, Alphabet's total traffic acquisition costs (TAC), or money it pays out to partners, jumped to 22% of its $22.67 billion ad revenue from 21% in the year ago period. 

Here's what Wall Street thinks about Alphabet's top and bottom line beat in light of the EC fine and the rising TAC costs. 

Stephen Ju, Credit Suisse (Outperform, $1,100 price target)

"We maintain our Outperform rating as our thesis based on the following factors remains unchanged: 1) monetization improvements in Search through product updates such as Expanded Text Ads and Individual Bid Adjustments, 2) larger-than-expected contribution from Google's larger non-Search businesses, namely YouTube, Play and Cloud, 3) optionality for value creation from new monetization initiatives such as Maps as well as the eventual commercialization of Google's Other Bets (Waymo)."

Daniel Salmon, BMO Capital Markets (Market Perform, $970 price target)

"We believe mobile search TAC to AAPL and ad revenue sharing with YouTube creators were likely the drivers. To be sure, both drove strong revenues, but reinforce our view that margins should continue to ease. At the same time, potential new ad load/catalysts like Promoted Places on Maps lack visibility. We believe GOOGL could remain range-bound (or only just grind up with the market) as new competition emerges (i.e., AMZN), the margin profile evolves, and antitrust concern remains elevated...We view GOOGL as a core holding, but we continue to see more 12-month upside in AMZN."

Andy Hargreaves, Pacific Crest (Overweight, $1,100 price target)

"We continue to recommend buying GOOGL. Alphabet's ad growth outlook remains strong and we see large incremental growth opportunities in YouTube and cloud."

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