Alphabet (GOOG, GOOGL) Soars After-Hours on Strong Quarterly Results
Alphabet (GOOG, GOOGL) stock saw a significant surge in after-hours trading, jumping as much as 13% after the tech giant reported quarterly results that surpassed revenue and earnings estimates. The company also announced a cash dividend program of $0.20 per share and approved stock repurchases of up to $70 billion.
CEO Sundar Pichai highlighted the strong performance in key areas such as Search, YouTube, and Cloud, which he believes positions the company well for future AI innovation. Revenue, excluding traffic acquisition costs, rose by 16% from the same period last year to $67.59 billion, exceeding analyst expectations.
Google executives emphasized their commitment to leading the shift to an AI-centric tech world and monetizing AI breakthroughs through advertising, cloud services, and subscriptions. However, investors are cautious about the costs associated with AI investments compared to the return, especially after Meta’s recent comments about growing expenses and slow revenue generation from AI investments.
Alphabet reported capital expenditures of $12 billion for the quarter, with CFO Ruth Porat stating that similar levels of spending are expected in the future to support AI investments. The company’s Cloud revenue experienced a significant increase of nearly 30% from the year before, surpassing $9 billion, as Google aims to claim more market share from competitors like Amazon and Microsoft.
Furthermore, ad revenue, which is the core of Google’s business, also saw a healthy increase of 13% to $61.66 billion. Google’s efforts in AI research and infrastructure, along with its global product footprint, were highlighted as key factors contributing to the company’s strong performance in the latest quarter.
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