Alphabet, Google’s parent company, has reported a stronger-than-expected first-quarter performance, driven by robust ad revenue growth and a continued ramp-up in its cloud business. The company’s ad revenue rose 8.5% to $66.89 billion, surpassing analyst expectations of a 7.7% increase. This growth was attributed to the successful integration of AI into Google’s search capabilities, enhancing its advertising appeal.
The company’s total revenue reached $90.23 billion, exceeding the average estimate of $89.12 billion. Alphabet’s profit was $2.81 per share, beating expectations of $2.01 per share. The company also announced a 5% increase in its quarterly dividend to 21 cents per share and plans to buy back $70 billion in stock.
Google Cloud revenue grew 28% to $12.26 billion, although this represented a slowdown from the previous quarter’s 30.1% growth. Analysts had expected $12.27 billion in cloud revenue. The company’s capital expenditures increased by 43% to $17.20 billion, reflecting its ongoing investments in AI infrastructure.
Despite macroeconomic uncertainties, including concerns about global economic downturns and the impact of trade policies on advertising spending, Alphabet’s management expressed confidence in its AI investments. The company’s CEO, Sundar Pichai, highlighted the success of AI Overviews in Google search, which now have 1.5 billion users per month. This feature has enhanced the effectiveness of advertising campaigns, providing a better return on investment for advertisers.
The positive earnings report and the company’s commitment to AI development have been well-received by investors. Alphabet’s shares rose 4% in extended trading, adding $75 billion to its market value. This performance has also had a positive impact on other tech giants, with Meta and Amazon’s shares rising in aftermarket trading.
