Alphabet's Q3 2024 Earnings Surge: AI Investments Boost Cloud and Ad Revenue

Alphabet posts 15% revenue increase for Q3 | Advertising | Campaign India

Ad revenue for the quarter came in at $65.85 billion, up about 10.4% year over year. Google parent company Alphabet is promising more to come in AI-powered advertising, on the heels of higher-than-expected revenue in its latest earnings report. Alphabet posted its latest earnings on Tuesday, reporting earnings per share of $2.12 and revenue of $88.27 billion during Q3 2024. It beat London Stock Exchange analyst estimates, thanks to strength of its search, advertising and growing Cloud revenue. Ad revenue for the quarter came in at $65.85 billion, up about 10.4% year over year. YouTube ad revenue also exceeded analyst expectations, bringing in $8.92 billion versus the $8.89 billion StreetAccount estimate. For the first time, YouTube's total ad and subscription revenue totaled above $50 billion over the last four quarters. "Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools," Alphabet CEO Sundar Pichai said in a press release. On a call with analysts, the company detailed more on how AI is evolving its capabilities. While Pichai acknowledged a learning curve for users, he said AI is increasing usage of its products. For example, more people are using AI search and asking more complex and different types of queries. The company has added ads to its AI overviews, including recently on mobile, and sees more monetisation opportunities there. Alphabet is also adding its AI large language model Gemini into its ad capabilities, including through its Performance Max and Demand Gen products. This has helped advertisers scale and make different creative assets with the help of AI. However, executives acknowledged the changes in technology will lead to a restructuring of its business. Earlier this month, it was announced Google search and ads boss Prabhakar Raghavan would move to the role of chief technologist. He will be replaced with Nick Fox, who was until recently VP for product and design for Google Search and Assistant.

Alphabet's AI investments boost cloud sales, lifts maturing ad business

Google parent Alphabet said on Tuesday its AI investments were "paying off" as it reported a 35% surge in its cloud business and US election-related spending lifted YouTube ad sales in the third quarter. Alphabet shares rose nearly 6% in after-market trading on Tuesday. Shares of Amazon and Microsoft, the top cloud companies, were up about 1% after hours. Alphabet topped third-quarter revenue and earnings expectations. Its mainstay Search business jumped 12% and as did revenue from YouTube ads. "Alphabet is the first major tech name to report earnings, and it hasn't disappointed," said Matt Britzman, senior equity analyst at Hargreaves Lansdown. "Cloud growth was strong ... which continues to support the argument that the major cloud providers are well-placed to benefit from the AI revolution." Perceived as slow to catch up with Big Tech rival Microsoft in the AI race, Google has been beefing up its Gemini AI chatbot and improving its AI-powered Search. The company is continuing to spend big on AI. Its new chief financial officer, Anat Ashkenazi, fielding her first analyst call, said Alphabet's capital expenditures in 2025 would be higher than this year. In the third quarter, Alphabet's capex rose 62% to $13 billion. The fourth quarter is expected to be similar, she said. Some analysts said Alphabet's quarter looked impressive compared with low expectations, and that its small but growing cloud business could slowly fill in for its slowing ad business. Google's long-established dominance of the digital ad market is under threat from Amazon and TikTok, which have become popular with advertisers looking to tap a ready pool of buyers. Its Search business is also facing scrutiny from regulators seeking to break up the company. But its cloud business grew at the fastest pace in eight quarters - to $11.35 billion - thanks to enterprises doubling down on cloud spending, which is essential to power artificial-intelligence technologies. Analysts estimated $10.86 billion. "I do think it was an impressive quarter because the fact that Google Cloud could more than offset Search decline speaks both to the growing importance of cloud revenues and the fact that the company continues to diversify its revenue base," said Bob O'Donnell, president of TECHnalysis Research. Google has rolled out ads in AI Overviews, which use generative AI to summarize content from a range of sources and display concise results for search queries. Analysts said users think the company's new AI tools are more effective than previously - a significant improvement from earlier this year when the feature drew harsh criticism for displaying inaccurate answers, including a pizza recipe that listed glue as an ingredient. Alphabet also beat profit expectations with earnings of $2.12 per share, compared with an average market estimate of $1.85, according to LSEG. Losing share "We had a slight tailwind from election-related ad spend in the third quarter, which was a little bit more pronounced in YouTube ads," Google's chief business officer, Philipp Schindler, said on a post-earnings call. Social media company Snap, which also depends on advertising, posted good news for shareholders, topping Wall Street targets for quarterly revenue and user growth, sending shares up 6% in after-hours trading. Alphabet's digital advertising sales - the biggest chunk of its total revenue - rose 10% to $65.85 billion in the third quarter. But that pace of growth slowed from the second quarter. "I completely expect Google to start losing share in the ad market over the next two to three years," said Angelo Zino, senior equity analyst at CFRA Research. "Clearly, as we kind of move towards more of an AI-driven market, there's going to be increasing competitive pressures out there as a result." According to data from eMarketer, Google's share of U.S. search advertising revenue is projected to fall below 50% next year, for the first time in at least 18 years. Meanwhile, Amazon's share is expected to grow to 24% from 22% this year. Alphabet's total revenue increased 15% to $88.27 billion in the July-September period, while analysts on average expected $86.30 billion, according to LSEG data. Pulling forward the company's smartphone launch this year helped boost revenue.

Alphabet's stock jumps as ads, AI and cloud fuel strong revenue growth - SiliconANGLE

Alphabet's stock jumps as ads, AI and cloud fuel strong revenue growth Shares of Google LLC's parent company Alphabet Inc. were trading higher in the after-hours session today following a solid earnings beat driven by strong cloud revenue growth. Alphabet's stock was up more than 5% today, adding to a slight gain made during the regular trading session. The company reported third quarter earnings before certain costs such as stock compensation of $2.12 per share on revenue of $88.27 billion, up 15% from a year ago. The results were better than expected. Wall Street had been anticipating earnings of just $1.85 per share on lower sales of $86.3 billion. Alphabet's all-important Google Cloud unit delivered revenue of $11.35 billion, representing growth of 35% on the $8.41 billion in sales it reported one year earlier. The company said this growth was primarily driven by rapid update of its artificial intelligence services, which includes subscriptions to enterprise customers. On a conference call with analysts, Alphabet Chief Executive Sundar Pichai (pictured) insisted that Google Cloud's "full stack" of AI products and services is already up and running at scale, used by billions of people worldwide and "creating a virtuous cycle". With today's report, Alphabet becomes the first of several 'megacap' technology companies to report its latest earnings results, with Microsoft Corp. and Meta Platforms Inc. set to report Wednesday, and Amazon.com Inc. and Apple Inc. to follow on Thursday. The company reported that its net income rose to $26.3 billion at the end of the quarter, up from $19.7 billion in the same period one year earlier. Google Search delivered $49.4 billion in sales during the quarter, up 12.3% from a year earlier, and it remains the biggest single contributor in terms of revenue growth, said Alphabet's chief financial officer Anat Ashkenazi. She told investors that the company is planning to use AI to streamline workflows, manage its headcount and its physical footprint going forward, as it looks to build on its earlier cost-cutting efforts, which included thousands of layoffs last year and several hundred more earlier this year. "I plan to build on these efforts but also evaluate where we might be able to accelerate work and where we might need to pivot to free up capital for more attractive opportunities," Ashkenazi, who joined Alphabet in June after spending 23 years at the pharmaceutical giant Eli Lilly Co. Alphabet's advertising business also grew well in the quarter, with revenue of $65.85 billion, up from $59.65 billion in the year-ago quarter, though it grew at a slower pace on a sequential basis. Within that segment, YouTube's advertising revenue came to $8.92 billion, just ahead of the analyst's target of $8.89 billion, with more rapid growth than in the previous quarter. That growth was encouraging as the Google-owned company has faced strong pressure from other advertising competitors such as Amazon, Netflix Inc. and TikTok's parent company Bytedance Ltd. Alphabet's chief business officer Philipp Schindler said one reason for the growth is that AI is helping to improve YouTube recommendations. It has been using the Gemini large language model family to help recommend "more relevant, fresher and personalized content" to viewers, he insisted. Investing.com analyst Thomas Monteiro said Alphabet's results can be taken as a bellwether of what's to come from the other big tech stocks set to report earnings later this week, as he's expecting a "very strong season" thanks to a "surprisingly resilient economy and growingly supportive monetary outlook." The analyst believes this is reflected in both Alphabet's cloud and advertising businesses. "While some of these numbers certainly come from the positive seasonality, particularly with the U.S. election driving increasing interest in YouTube and search, the stock has been fairly under-priced amid a market that can't seem to get enough tailwinds," Monteiro said. Another encouraging sign was the performance of Google Workspace, which is Alphabet's productivity tool suite. Ashkenazi said it also showed "strong growth", as did Google Cloud Platform, which is the company's data management and AI development suite, with revenue growing faster than that of the overall cloud unit. The Other Bets division, which includes Alphabet's life sciences business Verily and the self-driving car division Waymo, delivered sales of $388 million during the quarter, up from $297 million in the same period one year ago. Waymo last week closed on a bumper $5.6 billion funding round, and aims to expand its nascent robotaxi service beyond Los Angeles, Phoenix and San Francisco, where it currently operates. Pichai also talked up Google Lens, an image recognition product that uses smartphone cameras to conduct visual searches. According to Pichai, usage of the service has grown to more than 20 billion visual searches per month, making it one of the company's fastest-growing products of all. He said it's most often used by people out shopping, to find more information about the products they're looking at. During the quarter, Alphabet's executive team saw quite a shake up. Along with Ashkenazi's arrival, the company also replaced its longtime Search and Ads boss Prabhakar Raghavan with Nick Fox, who previously headed up the team leading the development of Google Assistant. In addition, Alphabet revealed that the team responsible for the Google Gemini app is joining Google DeepMind, where it will report to Demis Hassabis. Jeffrey Wlodarczak, an analyst with Pivotal Research Group, hailed Alphabet's strong beat across the board. "It reported stronger-than-expected revenue in all categories, including search, YouTube ads and Google Cloud, leading to 15%+ revenue growth," he said. In light of the results, Wlodarczak said Pivotal is raising its expectations for Alphabet in the fourth quarter and beyond, reiterating its "buy" rating on the stock, which still has "substantial upside from current levels."

Alphabet reports strong Q3 2024 earnings, driven by YouTube's $50-billion revenue milestone

"We're also focusing on enhancing the living room experience with features like multiview and a new option for creators to organize their content into episodes and seasons, much like traditional TV," the company said in a blog post.Google-owned YouTube for the first time ever achieved a revenue milestone of $50 billion, per latest earnings from the US-based technology major. Subscription growth was driven by offerings like YouTube TV, NFL Sunday Ticket and YouTube Music Premium. "We're also focusing on enhancing the living room experience with features like multiview and a new option for creators to organize their content into episodes and seasons, much like traditional TV," the company said in a blog post. Since the 2006 acquisition of YouTube in a $1.65-billion deal, the company has strengthened Google's fast-growing video business. As of September 2023, YouTube has 518 million monthly active users (MAUs) in India compared with Instagram's 244 million, according to Comscore data. India has been a crucible for some of YouTube's global product successes, including that of its short video format, Neal Mohan, CEO of the Google-owned platform, told ET. The Shorts- led contribution to the creator economy has seen a rise over the years. Mohan had told ET that the creator economy on YouTube has generated around Rs 16,000 crore of economic activity, producing 750,000 jobs in India. "We have paid out $70 billion to creators, musicians, artists, media companies in the last three years," he added. Google parent Alphabet announced its Q3 2024 earnings, reporting $88.27 billion in revenue for the July-to-September period. The company's strategic investments in AI, coupled with its comprehensive, full-stack approach to AI innovation, have emerged as key drivers of its positive financial results. The company said revenue grew 15% to $88.3 billion in the third quarter, above the Wall Street target of $86.3 billion. Alphabet's efforts to control costs contributed to a 34% increase in net income compared to the same period last year, reaching $26 billion, or $2.12 per share. "Our technology leadership and AI portfolio are helping us attract new customers, win larger deals, and drive 30% deeper product adoption with existing customers," Google and Alphabet CEO Sundar Pichai said on the Q3 earnings call. Google Cloud businesses continued to expand and revenue is up 15% from $77 billion in Q3 2023. Google products and platforms with more than 2 billion monthly users use Gemini models, including the newest 2 billion-user product, Google Maps have seen rise in token volume, consumer usage and business adoption. Recent AI advancements, including AI Overviews, that resolves user queries, will reach more than 1 billion MAU while Circle to Search is available on more than 150 million Android devices accounting for one-third people using it on a weekly basis. The new Lens feature recorded visual searches per month exceeding 20 billion. Pichai called the company's AI innovation a "differentiated approach" that is guided by world class research teams with expertise in deep, technical AI research and a robust AI infrastructure that includes data centers, chips, and a global fiber network. "We continue to invest in state-of-the-art infrastructure to support our AI efforts, including important work inside our data centers to drive efficiencies, while making significant hardware and model improvements," the Google CEO wrote on X. Rivals like Amazon, Meta, and Microsoft are scheduled to release their quarterly earnings on Wednesday and Thursday.

Google parent Alphabet posts 15% jump in revenue as CEO says AI...

Google parent Alphabet topped third-quarter revenue expectations on Tuesday, helped by steady growth in its digital advertising business and an AI-driven jump in demand for its cloud services. Shares of the company rose more than 3% in extended trading. CEO Sundar Pichai said investments in AI were "paying off" through use and sales in its Search and Cloud businesses. YouTube revenue surpassed $50 billion over the past four quarters, he said. Ad sales for the video streaming service rose 12% to $8.92 billion. Digital advertising sales - the biggest chunk of Alphabet's total revenue - rose to $65.85 billion from $59.65 billion. Revenue from Google's cloud platform grew to $11.35 billion, beating analysts' estimate of $10.86 billion. Alphabet reported a profit of $2.12 per share. Analysts were expecting per-share earnings of $1.85. Revenue increased 15% to $88.27 billion in the July-September period, while analysts on average expected $86.30 billion, according to LSEG data.

Alphabet's stock jumps as cloud fuels strong revenue growth - SiliconANGLE

Shares of Google LLC's parent company Alphabet Inc. trading higher in the after-hours session today following a solid earnings beat driven by strong cloud revenue growth. Alphabet's stock was up more than 5% in extended trading, adding to a slight gain made during the regular trading session. The company reported third-quarter earnings before certain costs such as stock compensation of $2.12 per share on revenue of $88.27 billion, up 15% from a year ago. The results were better than expected. Wall Street had been anticipating earnings of just $1.85 per share on lower sales of $86.3 billion. Alphabet's all-important Google Cloud unit delivered revenue of $11.35 billion, representing growth of 35% on the $8.41 billion in sales it reported one year earlier. The company said this growth was primarily driven by rapid update of its artificial intelligence services, which includes subscriptions to enterprise customers. On a conference call with analysts, Alphabet Chief Executive Sundar Pichai (pictured) insisted that Google Cloud's "full stack" of AI products and services is already up and running at scale, used by billions of people worldwide and "creating a virtuous cycle." With today's report, Alphabet becomes the first of several "megacap" technology companies to report its latest earnings results, with Microsoft Corp. and Meta Platforms Inc. set to report Wednesday, and Amazon.com Inc. and Apple Inc. to follow on Thursday. The company reported that its net income rose to $26.3 billion at the end of the quarter, up from $19.7 billion in the same period one year earlier. Google Search delivered $49.4 billion in sales during the quarter, up 12.3% from a year earlier, and it remains the biggest single contributor in terms of revenue growth, said Alphabet Chief Financial Officer Anat Ashkenazi. She told investors that the company is planning to use AI to streamline workflows, manage its headcount and its physical footprint going forward, as it looks to build on its earlier cost-cutting efforts, which included thousands of layoffs last year and several hundred more earlier this year. "I plan to build on these efforts but also evaluate where we might be able to accelerate work and where we might need to pivot to free up capital for more attractive opportunities," Ashkenazi, who joined Alphabet in June after spending 23 years at the pharmaceutical giant Eli Lilly Co. Alphabet's advertising business also grew well in the quarter, with revenue of $65.85 billion, up from $59.65 billion in the year-ago quarter, though it grew at a slower pace on a sequential basis. Within that segment, YouTube's advertising revenue came to $8.92 billion, just ahead of the analyst's target of $8.89 billion, with more rapid growth than in the previous quarter. That growth was encouraging as the Google-owned company has faced strong pressure from other advertising competitors such as Amazon, Netflix Inc. and TikTok's parent company Bytedance Ltd. Alphabet Chief Business Officer Philipp Schindler said one reason for the growth is that AI is helping to improve YouTube recommendations. It has been using the Gemini large language model family to help recommend "more relevant, fresher and personalized content" to viewers, he insisted. Investing.com analyst Thomas Monteiro said Alphabet's results can be taken as a bellwether of what's to come from the other big tech stocks set to report earnings later this week, as he's expecting a "very strong season" thanks to a "surprisingly resilient economy and growingly supportive monetary outlook." The analyst believes this is reflected in both Alphabet's cloud and advertising businesses. "While some of these numbers certainly come from the positive seasonality, particularly with the U.S. election driving increasing interest in YouTube and search, the stock has been fairly underpriced amid a market that can't seem to get enough tailwinds," Monteiro said. Another encouraging sign was the performance of Google Workspace, which is Alphabet's productivity tool suite. Ashkenazi said it also showed "strong growth," as did Google Cloud Platform, which is the company's data management and AI development suite, with revenue growing faster than that of the overall cloud unit. The Other Bets division, which includes Alphabet's life sciences business Verily and the self-driving car division Waymo, delivered sales of $388 million during the quarter, up from $297 million in the same period one year ago. Waymo last week closed on a bumper $5.6 billion funding round, and aims to expand its nascent robotaxi service beyond Los Angeles, Phoenix and San Francisco, where it currently operates. Pichai also talked up Google Lens, an image recognition product that uses smartphone cameras to conduct visual searches. According to Pichai, usage of the service has grown to more than 20 billion visual searches per month, making it one of the company's fastest-growing products. He said it's most often used by people out shopping, to find more information about the products they're looking at. During the quarter, Alphabet's executive team saw quite a shakeup. Along with Ashkenazi's arrival, the company also replaced its longtime Search and Ads boss Prabhakar Raghavan with Nick Fox, who previously headed up the team leading the development of Google Assistant. In addition, Alphabet revealed that the team responsible for the Google Gemini app is joining Google DeepMind, where it will report to Demis Hassabis. Jeffrey Wlodarczak, an analyst with Pivotal Research Group, hailed Alphabet's strong beat across the board. "It reported stronger-than-expected revenue in all categories, including search, YouTube ads and Google Cloud, leading to 15%+ revenue growth," he said. In light of the results, Wlodarczak said Pivotal is raising its expectations for Alphabet in the fourth quarter and beyond, reiterating its "buy" rating on the stock, which still has "substantial upside from current levels."

Alphabet shares soar as Google Cloud and AI accelerate growth

Google's parent company, Alphabet, reported third-quarter earnings that exceeded analysts' expectations across key metrics, sending its shares up nearly 6% in after-hours trading. Artificial intelligence (AI) has been a key driver of growth for the world's largest search engine platform, with Google Cloud accelerating its performance. CEO Sundar Pichai remarked: "The momentum across the company is extraordinary. Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off, with consumers and partners benefiting from our AI tools." Following the earnings report, the stock is poised to hit a three-month high, having surged amid strong results, contributing to a 31% rally year-to-date. The highlight of the earnings report was the acceleration in Google Cloud's growth, indicating that Alphabet's substantial investments in the segment and its AI infrastructure are yielding results. The division generated $11.35 billion (€10.49 billion) in revenue during the third quarter, marking a 35% increase from the previous year and a 9.6% sequential rise. This is the second time the segment has surpassed the $10 billion threshold. Google Cloud is viewed as Alphabet's most significant business unit as it competes with Amazon and Microsoft in the rapidly growing cloud industry. The segment encompasses infrastructure and platform services, collaboration tools, and other services for enterprise clients. The widespread adoption of AI has intensified the race in cloud computing, making it a key factor in a company's market valuation. "In Cloud, our AI solutions are helping drive deeper product adoption with existing customers, attract new clients, and secure larger deals," Pichai noted. Google's YouTube ad business has also gained significant momentum, with revenue reaching $8.9 billion (€8.2 billion), representing a 12% year-on-year increase despite rising competition from platforms such as Netflix, TikTok, and Amazon. Chief Business Officer Philipp Schindler mentioned during the earnings call that the company's AI tool, Gemini, has provided YouTube users with more personalised content. Google's overall advertising revenue rose by 10%, reaching $65.9 billion (€60.1 billion) in the third quarter, further cementing its leading position in the digital advertising market, with Meta Platforms trailing behind. Alphabet comfortably exceeded market expectations across all the other metrics, posting total revenue of $88.27 billion (€81.6 billion) for the third quarter, a 15% year-on-year increase. Earnings per share were reported at $2.12, representing 37% annual growth, significantly surpassing the forecast of $1.85. Additionally, Alphabet's "Other Bets" division, which includes its self-driving vehicle service Waymo, saw revenue growth of 31%. Waymo recently completed a $5.6 billion (€5.2 billion) funding round to expand its robotaxi service beyond San Francisco, Los Angeles, and Phoenix, according to a report by CNBC last week. In the second half of 2023, Alphabet began reducing its headcount and restructuring teams to shift capital towards more AI-focused divisions. According to the earnings report, the total number of employees dropped by 1,112 to 181,269 compared to the previous year. The company noted that the team behind the AI language model, Gemini, will be integrated into Google DeepMind, an AI research lab, and is "currently evaluating the potential impact the reorganisation will have on our segment operating results." Chief Financial Officer Anat Ashkenazi stated during the earnings call that Alphabet will continue its current cost-cutting measures and improve efficiency to redirect capital towards "more attractive opportunities."

Alphabet jumps 6% on Q3 earnings as CEO says AI bet is 'paying off'

Google's parent company Alphabet Inc. (GOOG) saw its share price jump 5.9% after-hours as its third-quarter results beat Wall Street earnings and revenue estimates -- boosted by its artificial intelligence business. GOOG closed up 1.66% on Oct. 29 at $171.14, continuing to climb after the bell to $181.22, according to Yahoo Finance. Its share price is up 21.73% year-to-date. The tech giant's Q3 revenues hit $88.27 billion, rising 15% from the same quarter a year ago and beating Wall Street estimates by 2.2%. Its quarterly earnings rose 35% from Q3 2023 to $2.12 per share, beating the $1.85 earnings per share estimate by 13.6%. Its Google Cloud revenues jumped 35% year-on-year to $11.4 billion, with Alphabet saying it saw growth across its AI infrastructure and generative AI products. "The long-term focus and investment in AI are paying off and driving success for the company and for our customers," Alphabet and Google CEO Sundar Pichai said on an Oct. 29 earnings call. Alphabet's strong Q3 results come ahead of earnings for its Big Tech rivals this week, with Meta and Microsoft scheduled to report on Oct. 30, then Amazon and Apple the day after on Oct. 31. Pichai said on the call that Google is using AI in its coding, which he claimed has boosted productivity. Related: Meta is reportedly building its own AI-powered search engine "Today, more than a quarter of all new code at Google is generated by AI, then reviewed and accepted by engineers," he said. Alphabet's biggest revenue generator was its Google Ads business, which brought in $65.86 billion in Q3, up 10.4% from the year-ago quarter. Its flagship Google Search business was its second-biggest taker, with $49.39 billion in revenues, up 10.9% from 2023's third quarter.

Alphabet Q3 Earnings Highlights: Revenue Beat, EPS Beat, Google Cloud Up 35%, 'Momentum Across The Company Is Extraordinary' - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Alphabet reports third-quarter revenue of $88.27 billion, up 15% year-over-year. Technology giant Alphabet Inc GOOG GOOGL reported third-quarter financial results after the market close Tuesday. Here are the key highlights. What Happened: Alphabet reported third-quarter revenue of $88.27 billion, up 15% year-over-year. The total beat a Street consensus estimate of $86.31 billion, according to data from Benzinga Pro. The company reported third-quarter earnings per share of $2.12, which beat a Street consensus estimate of $1.84. Revenue was broken down as follows in the third quarter, with the prior year's total in parentheses: Google Search: $49.4 billion ($44 billion) YouTube ads: $8.9 billion ($8 billion) Google Network: $7.5 billion ($7.7 billion) Total Google Advertising: $65.9 billion ($59.6 billion) The company also reported Google subscribers, platform and devices revenue of $10.7 billion, up from $8.3 billion in the prior year and Google Cloud revenue of $11.4 billion, up from $8.45 billion in the third quarter of the prior year. Google Cloud revenues were up 35% year-over-year in the quarter, with the company highlighting continued growth from artificial intelligence. Read Also: Alphabet Q3 Earnings Preview: Antitrust Probe, 2024 Election, Streak Of Revenue Beats And More For Investors To Watch "The momentum across the company is extraordinary," Alphabet CEO Sundar Pichai said. "Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools." Pichai said AI features are expanding what people search for and how they search for it. The company is winning larger deals and attracting new customers thanks to its AI solutions in cloud, the CEO said. YouTube passed $50 billion in total ads and subscription revenues over the last four quarters for the first time, he said. "I'm looking forward to driving more advances for consumers, customers and creators globally." GOOG Price Action: Alphabet Class C stock is up 3.38% to $176.93 in after-hours trading Tuesday versus a 52-week trading range of $123.88 to $193.30. Read Next: Alphabet Bulls Charge Ahead Of Q3: Will Meta's AI Search, DOJ Roadblocks Change The Game? Photo via Shutterstock. Market News and Data brought to you by Benzinga APIs

Google beats third-quarter earnings expectations on AI momentum

Audiences will be major beneficiaries of AI in the media industry, CEO says Consolidated Alphabet revenues grew 15% year over year, the company said, "reflecting strong momentum across the business." The tech giant reported net income increased 34%, and earnings per share, or EPS, increased 37% to $2.12. Google's shares were up 1.66% at the market close on Tuesday, and were up 2.25% during after hours trading. The company's stock has climbed 22.6% so far this year. "The momentum across the company is extraordinary," Google chief executive Sundar Pichai said in a statement. "Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools." Google was expected to report revenues of $86.4 billion and EPS of $1.84 for the third quarter, according to analyst estimates compiled by FactSet. In mid-October, analysts at Bank of America Global Research (BAC-0.21%) said they expected to see search strength in the third quarter "suggesting AI is driving higher monetization," as well as "positive commentary" from Google on how its AI Overviews feature is "driving higher usage, or new advertising opportunities." "In Search, our new AI features are expanding what people can search for and how they search for it," Pichai said. "In Cloud, our AI solutions are helping drive deeper product adoption with existing customers, attract new customers and win larger deals." Total ads and subscription revenues for YouTube "surpassed $50 billion over the past four quarters for the first time," he added. Meanwhile, Meta (META+2.58%) is reportedly developing a search engine to lessen its reliance on Google Search and rival Microsoft's (MSFT+1.26%) Bing to power responses for its Meta AI chatbot. Meta currently uses the search engines to provide answers to queries, The Information reported, citing an unnamed person familiar with the matter. Another person told the publication that building its own search engine could help Meta if Google or Microsoft end their partnerships. But Meta's reported search engine would "be at a data and web scraping disadvantage" compared to Google due to a "limited number of Meta AI users," Bank of America Global Research analysts said in a note on Tuesday. Still, "[g]iven the significant amount of time spent on Meta's apps, if users increasingly engage with Meta AI for information, there is a possibility that a portion of internet traffic could shift away from Google Search," the analysts said. They added that "Google could (and should) highlight new AI Overview capabilities and any related search query traction to improve increasingly cautious sentiment on search share risk." In August, a federal judge ruled that Google had monopolized the online search engine market, concluding the Department of Justice's anti-trust case against the tech giant. The Justice Department was then reportedly considering ways to break up Google's business, such as forcing the company to sell off some of its parts. A month later, Google was facing another anti-trust lawsuit over its online advertising technology.

Google reports strong growth driven by AI, Cloud

San Francisco (AFP) - Google's parent company Alphabet reported robust third-quarter results on Tuesday, with revenue climbing 15 percent year-over-year to $88.3 billion, powered by strong performance from its crucial advertising business and growth in cloud services. The technology giant's net income surged 34 percent to $26.3 billion, while earnings per share increased 37 percent to $2.12. Operating margins expanded significantly, rising 4.5 percentage points to 32 percent, reflecting improved operational efficiency at one of the world's biggest companies. "Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools," said CEO Sundar Pichai, referring to the burgeoning field of artificial intelligence. The results showed that Google is holding its own despite worry that the search engine juggernaut has been caught short in the AI race. Google faces increasing pressure as its world-dominating search engine competes for ads with a widening array of platforms, including Meta, Amazon, Apple, TikTok and even streamers such as Netflix. Questions also persist about whether its search engine will withstand the growing popularity of generative AI chatbots like ChatGPT, which can answer questions without the clutter of Google's list of links. In response to these pressures, Google earlier this month reshuffled its search engine business, replacing the division chief after a four-year tenure. The company also moved its Gemini chatbot team to Google DeepMind, separating it from the search group. Google Cloud emerged as a standout performer in the June-to-September period, with revenue jumping 35 percent to $11.4 billion, driven by increased adoption of AI infrastructure and solutions. That business, which trails market leaders Amazon and Microsoft, provides businesses with computing power, data storage, and AI tools over the internet. Share price rises The company's core Google Services segment, which includes Search, YouTube, and other advertising products, grew 13 percent to $76.5 billion. YouTube hit a significant milestone, with total advertising and subscription revenues exceeding $50 billion over the past four quarters for the first time. After the release, investors sent Google's share price higher by three percent in after-hours trading. Despite the solid earnings, Google faces significant legal challenges, at least in the long-term. In August, a federal judge found that Google's search engine was an illegal monopoly, with the US government suggesting a company breakup might be appropriate. A separate antitrust lawsuit challenges its dominance of online advertising. Additionally, Google has been ordered to open Android-powered smartphones to rival app shops following a case brought by Fortnite-maker Epic Games, though that decision was suspended pending appeal. While those legal battles are expected to take years to resolve, they have raised questions about the company's long-term strategy and its heavy reliance on search engine advertising revenue.

Alphabet shares Q3 revenue up 15% to $88.27 billion

Waymo gets a shout-out as the start among the company's "Other Bets" projects, which altogether brought in $388 million. And on the Android side, Picahi shares some love for both Circle to Search and Google Lens -- apparently Circle to Search is so popular that a solid third of the people who have tried it continue to use it at least weekly. Maybe the biggest question for a lot of people is going to be how well the company's substantial investments in all things AI have been paying off. That's more than a little tricky to put a figure on -- Alphabet's report doesn't even attempt to -- because it's just become such a pervasive component of nearly everything being worked on. But even without a clear number there, Alphabet communicates that it sees its current success as payoff from its investment in tech like AI. Specifically, the company points to places where AI has really helped streamline certain approaches, like coding -- would you believe a solid 25% of Google code is now initially generated by AI (and later reviewed by engineers, of course)?

Google reports strong growth driven by AI, cloud

SAN FRANCISCO (AFP) - Google's parent company Alphabet reported robust third-quarter results with revenue climbing 15 per cent year-over-year to USD88.3 billion, powered by strong performance from its crucial advertising business and growth in cloud services. The technology giant's net income surged 34 per cent to USD26.3 billion, while earnings per share increased 37 per cent to USD2.12. Operating margins expanded significantly, rising 4.5 percentage points to 32 per cent, reflecting improved cost efficiency at one of the world's biggest companies. "Our commitment to innovation, as well as our long-term focus and investment in artificial intelligence (AI), are paying off with consumers and partners benefiting from our AI tools," said Chief Executive Officer Sundar Pichai, referring to the burgeoning field of AI. The results showed that Google is holding its own despite worry that the search engine juggernaut has been caught short in the AI race. Google also faces increasing pressure as its world-dominating search engine competes for ads with a widening array of platforms, including Meta, Amazon, Apple, TikTok and even streamers such as Netflix. But Emarketer senior analyst Evelyn Mitchell-Wolf said Google proved that its defense "is locked in, and it heads into the holiday season well-positioned to win ad budgets." The company also satisfied questions about whether its search engine will withstand the growing popularity of generative AI chatbots like ChatGPT, which can answer many queries directly in lieu of an Internet search. In response to these pressures, Google earlier this month reshuffled its search engine business, replacing the division chief after a four-year tenure. The company also moved its Gemini chatbot team to Google DeepMind, separating it from the search group. Pichai said that Google Search's AI Overviews, which display a snapshot of information at the top of the results page, was proving a success and available to one billion users in more than 100 countries. "We are definitely expanding what's possible in search and it's been really heartening to see users adapt," Pichai told analysts. Google Cloud emerged as a standout performer in the June-to-September period, with revenue jumping 35 per cent to USD11.4 billion, driven by increased adoption of AI infrastructure and solutions. That business, which trails market leaders Amazon and Microsoft, provides businesses with computing power, data storage and AI tools delivered over the Internet. The company's core Google Services segment, which includes Search, YouTube, and other advertising products, grew 13 per cent to USD76.5 billion. YouTube hit a significant milestone, with total advertising and subscription revenues exceeding USD50 billion over the past four quarters for the first time. After the release, investors sent Google's share price higher by five per cent in after-hours trading. Despite the solid earnings, Google faces significant legal challenges, at least in the long-term. In August, a federal judge found that Google's search engine was an illegal monopoly, with the US government suggesting a company breakup might be appropriate. A separate antitrust lawsuit challenges its dominance of online advertising. Additionally, Google has been ordered to open Android-powered smartphones to rival app shops following a case brought by Fortnite-maker Epic Games, though that decision has been suspended pending appeal. While those legal battles are expected to take years to resolve, they have raised questions about the company's long-term strategy and its heavy reliance on search engine advertising revenue.

Google stock climbs over 4% after AI momentum drives earnings

Audiences will be major beneficiaries of AI in the media industry, CEO says Consolidated Alphabet revenues grew 15% year over year to $88.3 billion, "reflecting strong momentum across the business," the company said. Net income increased 34%, and earnings per share, or EPS, increased 37% to $2.12. The company's cloud division revenues grew 35% to $11.4 billion due to "accelerated growth in Google Cloud Platform across AI infrastructure, Generative AI Solutions, and core GCP products," it said. Alphabet's shares were up 1.66% at the market close on Tuesday and were up around 6.4% during pre-market trading on Wednesday. The company's shares are up around 28.5% so far this year. The company was expected to report revenues of $86.4 billion and EPS of $1.84 for the third quarter, according to analyst estimates compiled by FactSet (FDS-0.26%). "The momentum across the company is extraordinary," Google chief executive Sundar Pichai said in a statement. "Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools." In its cloud unit, Google's "AI solutions are helping drive deeper product adoption with existing customers," as well as attracting new customers and larger deals, he said. On the company's earnings call, Pichai said Google engineers are currently using AI to generate more than a quarter of all new code at the company, which they then have to review and accept. Using AI for coding "is boosting productivity and efficiency," he said. Meanwhile, Google's AI Overview search feature will now reach over 1 billion users each month after rolling out to more than 100 new countries and territories, Pichai said, adding that AI Overview is seeing stronger engagement, and users are asking "longer and more complex questions." Integrating ads into AI Overview is also driving connections between consumers and businesses, he said.

AI, cloud boost Alphabet profits by 34 percent

Alphabet's profit jumped 34 percent in the third quarter as the parent company of search giant Google reported strong growth in its cloud business amid robust demand for computing and data services used to train and run generative artificial intelligence models. The solid results released on Tuesday helped alleviate investors' fears about the financial returns on the vast sums being spent on AI by Alphabet and other Big Tech peers as they seek to dominate the nascent sector. The standout unit was Google Cloud, where revenue increased 35 percent to $11.4 billion and operating profit increased sevenfold to $1.9 billion from $266 million in the same period last year. Net income was $26.3 billion compared with $19.7 billion in the same period a year earlier, exceeding analysts' expectations for $22.8 billion. Revenue rose 15 percent to $88.3 billion in the three months through to the end of September, beating the average estimate for $86.3 billion. "Our long-term focus and investment in AI [is] paying off," said chief executive Sundar Pichai, citing customer demand for its specialized clusters of chips and the growing popularity of its AI Overviews feature in search. "We continue to invest in state-of-the-art infrastructure to support our AI efforts, from the US to Thailand, to Uruguay." However, Google's cloud business remains a distant third to Microsoft's Azure and market leader Amazon Web Services and competition is cut-throat. This week, Microsoft accused Google of running "shadow campaigns" and secretly funding lobby groups to undermine its position with regulators as it tries to poach customers and win market share. Revenue at Alphabet's core search and advertising businesses rose 10 percent to $65.9 billion. While the rate of growth slowed slightly, it showed little impact from AI chatbot challengers such as OpenAI's ChatGPT. YouTube revenue rose 12 percent to $8.9 billion for the quarter -- and Google noted its ads and subscription sales surpassed $50 billion over the past four quarters for the first time as the platform expands into sports such as the National Football League. "The results show a strong beat across all segments, with notable strength in subscriptions and Cloud," said Jefferies analyst Brent Thill. Alphabet shares were up more than 6 percent in pre-market trading on Wednesday. The stock had previously gained 22 percent this year, giving it a market capitalisation of $2.1 trillion and making it the fourth most-valuable listed company in the world behind Apple, Nvidia and Microsoft.

Google Q3 FY24 Results: Gemini API Sees 14x Growth in 6 Months

Alphabet, the parent company of Google, posted strong results in its Q3 2024 earnings on Tuesday. The company reported revenues of $88.3 billion, a 15% increase year-over-year. Additionally, Google services generated $76.5 billion, up 13% and Google Cloud revenues surged 35% to $11.4 billion. AI's contribution to this quarter's results stood out even as the company focussed on the Gemini application. "Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off and driving success for the company and for our customers," said Alphabet and Google CEO Sundar Pichai. "We are uniquely positioned to lead in the era of AI because of our differentiated full-stack approach to AI innovation, and we're now seeing this operate at scale." In the past six months, Gemini API calls have increased nearly 14 times. Pichai said that when Snapchat was looking to add more experiences to its 'My AI' chatbot, it chose Gemini's multimodal capabilities. This also resulted in 2.5 times the engagement with the application in the US. Interestingly, this has also led to lower costs. Pichai said that ever since they started testing AI Overviews, which will now be available in more than 100 countries, thereby reaching 1B+ users, the company has significantly reduced machine costs per query. Over the last 18 months, there has been a cost reduction of over 90% for these queries. At the same time, doubling the size of their custom Gemini model. Moreover, Pichai even highlighted that employee agents from Gemini for Google Workspace are highly rated, with 75% of daily users noting improved work quality. Not just through Gemini, Pichai said that the company's expertise and AI portfolio are helping attract new customers and achieve a 30% increase in product adoption among existing clients, including AI infrastructure. Citing an example of LG AI research that has been using a combination of Google TPUs and GPUs, the team reduced the inference processing time for its multimodal model by over 50% and operating costs by 72%. Customers utilise the AI platform with BigQuery to analyse multi-modal data from any storage location, achieving ultra-low latency access to Gemini. While AI has been driving growth in all divisions, the company's traditional search and ads continued to bring great numbers. Search and other revenues increased by 11% to reach $44.03 billion, while YouTube ad sales saw a notable rise of 12.4%, totalling $7.95 billion. This has fortified Google's dominance in the search and ad market despite competitors such as OpenAI and Perplexity trying to challenge it. Interestingly, Meta is also reportedly developing its own AI search engine.

Alphabet's AI Strategy Fuels 15% Revenue Surge Despite Antitrust Threats

The search engine giant's revenue surged, fueled by continued demand for AI products and services. Alphabet reported better-than-expected growth on Tuesday. The tech giant's AI bets helped the company's revenue surge by 15% this quarter. Google's parent company beat analyst expectations for a third consecutive quarter despite being embroiled in major legal battles across the industry. Alphabet Surges Alphabet reported $88.27 billion in revenue for the past quarter, representing an overall growth of 15%. The company reported on Tuesday that cloud services revenue, which includes Google's AI products, rose 35%. The continued interest in AI across almost every industry has helped Google's cloud arm become one of its fastest-growing sectors. In the latest earnings report , CEO Sundar Pichai said that the company's long-term focus and investment in AI was "paying off" with consumers and partners. Alphabet also reported a 10% increase in advertising revenue, with Pichai highlighting YouTube ads as a significant success. By embedding generative AI models like Gemini into Google Search, Google claims to have improved search accuracy and increased user engagement. Google's Illegal Search Monopoly Alphabet's success follows a year of legal battles centered on Google's search dominance. A tumultuous 12 months for the company reached a critical peak in August when the Department of Justice (DOJ) won its landmark case challenging Google's search dominance. The U.S. judge ruled that the company acted illegally to stifle its competition and maintain a monopoly on online search. "Google is a monopolist, and it has acted as one to maintain its monopoly," Judge Mehta wrote in his ruling. Now, Google is bracing itself for the aftermath of the ruling, which could see the tech giant's parts split up and its high-profile partnerships with other tech giants taken apart. More Antitrust Lawsuits The landmark loss against the DOJ is just one of the legal battles Google currently faces. Google suffered a significant loss to Epic Games in December 2023. Epic Games sued the search engine giant in 2020, accusing the company of using deceptive tactics to make its app store dominant over rivals. The jury decided that the search giant had operated an illegal monopoly. In October 2024, Google requested a temporary pause on the Judge's injunction. In September, the DOJ launched an antitrust lawsuit against Google, this time accusing the tech giant of having an illegal monopoly over online advertising. Microsoft recently publicly attacked Google, accusing the company of conducting a series of attacks and using shady tactics. "It is funding - directly and indirectly - various industry commentators and academics to attack Microsoft and author "studies" that can be cited to discredit us," Rima Alaily, Microsoft lawyer, wrote in an open letter. Despite Google's recent success, the outcome of these antitrust cases can significantly shape the company's future business strategies, potentially opening the market for greater competition.

Google-parent Alphabet says its big bet on AI is paying off

STORY: Google-parent Alphabet says its investments in AI are paying off. On Tuesday, the tech giant beat profit forecasts for the third quarter, and said sales at its cloud unit jumped by more than a third. The news drove Alphabet shares nearly 6% higher in after-hours trade. Capital expenditures rose by almost two-thirds over the quarter, hitting $13 billion. Among other things, the money has been spent to beef up its Gemini chatbot. Analysts say there are signs of progress, with the firm's AI tools getting better at providing answers. Earlier in the year, Google's chatbot drew criticism for inaccurate responses, including a pizza recipe that listed glue as an ingredient. Now Alphabet will hope that AI can make up for slower growth in its mainstay search business. That unit grew by 12% over the period. Google also faces growing competition in the online advertising sector, which it had long dominated. Rivals like Amazon and TikTok have been gaining market share. Researchers at eMarketer predict Google's share of U.S. search advertising revenue will fall below 50% next year for the first time in at least 18 years.

Alphabet posts big revenue and profit growth

Google Cloud grows fast thanks to AI, which now writes a quarter of all G-code Alphabet CEO Sundar Pichai has warned that the Department of Justice's proposed remedies for Google's monopolistic behaviour could impact US leadership of the global tech market - after announcing enormous growth in the megalithic firm's ad business. The conglomerate on Tuesday announced [PDF] Q3 2024 revenue of $88.25 billion - a nice jump from the $76.7 billion from the same quarter last year. Net income was $26.3 billion, up from $19.7 billion last year. Execs told investors Google continues to "re-engineer the cost base," but the many rounds of job cuts we've reported have seen headcount fall by just 1,112 - to 181,269 - in the last year. A more significant cut was made to the cost of serving AI Overviews - the prose summaries of search results that Google produces using generative AI. That figure dropped by 90 percent. That matters, because generative AI changes the search experience. If Google can't match its rivals, its revenue could take a hit. Pichai revealed Overviews were enabled in more than a hundred new countries this week, will therefore be available to over a billion users, and have been integrated well with its ads platform. The CEO also talked up the AI prowess of the Google Cloud, which posted $11.3 billion of revenue - a $2.9 billion year-over-year jump. Pichai said the business has "real momentum" and its AI offerings "are helping us attract new customers, win larger deals, and drive 30 percent deeper product adoption with existing customers." The G-cloud can do so, he observed, because Google has all the AI hardware needed - a blend of Nvidia GPUs and its own sixth-gen Trillium tensor processing units - to satisfy most workloads. One workload from which Google itself is benefiting is code generation: Pichai said a quarter of the Chocolate Factory's new code is now written by machines and then reviewed by humans. "This Helps our engineers do more and move faster," the CEO enthused. Capital expenditure remained colossal: $13 billion went out the door in Q3, dominated by servers and networking equipment. Pichai told investors to expect the same level of spend in the next quarter.p> Pichai took the time to note a couple of milestones. The first was YouTube's combined ads and subscription revenue topping $50 billion over a four-quarter period - meaning the vid-streaming site accounts for almost a sixth of Alphabet revenue. The other was Alphabet's Waymo self-driving car unit, which investors were told "is now a clear technical leader within the autonomous vehicle industry and creating a growing commercial opportunity." Waymobiles are driving more than one million fully autonomous miles and serving over 150,000 paid rides each week. Investment analysts on Alphabet's earnings call wanted to know if the antitrust case Google recently lost could jeopardize deals that see its search services enjoy prominent position on many devices. Pichai steered around such questions on grounds that the case is in progress, but warned possible remedies "could have unintended consequences, particularly to the dynamic tech sector and the American leadership there." Of course the reason for the antitrust action being brought was results like those announced on Tuesday - demonstrating that Google has colossal market share and is only getting bigger and more powerful. Alphabet execs evidently didn't join the dots. Investors like what they heard: Alphabet's share spent the day shuffling upwards from $169.38 to $171.86, before popping to over $181 in after-hours trading. ®

Google Parent Alphabet's Stock Pops as Cloud Revenue Soars on AI Demand

Google parent Alphabet (GOOGL) reported third-quarter results that topped analysts' estimates, sending shares higher after the bell Tuesday. Alphabet's third-quarter revenue climbed 15% year-over-year to $88.27 billion, above the analyst consensus from Visible Alpha. Net income came in at $26.3 billion or $2.12 per share, up from $19.69 billion or $1.55 per share a year earlier, beating Street estimates. Google Cloud delivered revenue of $11.4 billion, exceeding analysts' expectations and representing 35% growth from the year-ago period as demand for artificial intelligence (AI) surged. Google Cloud's AI infrastructure and generative AI solutions led growth, along with other core cloud products. The quarter was also Alphabet's first since former Eli Lilly (LLY) executive Anat Ashkenazi took over as the company's chief financial officer on July 31. Shares of Alphabet surged 4% in extended trading following the release. They were up nearly 22% for the year through Tuesday's close.

A.I. Is Boosting Google Earnings and Changing How Engineers Work, Says CEO Pichai

CEO Sundar Pichai said about a quarter of new code at Google is generated by A.I. Alphabet (GOOGL), the parent company of Google (GOOGL), surprised Wall Street yesterday (Oct. 29) with better-than-expected financial results for the July-September quarter. The tech conglomerate saw its revenue increase 15 percent year-over-year to $88.3 billion, while net income jumped 34 percent to $26.3 billion. Alphabet shares jumped more than 5 percent this morning. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters More than half of Alphabet's revenue came from Google Search, which brought in $49.3 billion for the quarter, up from $44 billion during the same period in 2023. The company earlier this year began experimenting with generative A.I. across its search engine with the introduction of A.I.-generated search summaries. Known as AI Overviews, this feature was rolled out in more than 100 new countries this week and is expected to reach more than 1 billion users on a monthly basis, according to CEO Sundar Pichai. "We are seeing strong engagement, which is increasing overall search usage and user satisfaction," Pichai said during the earnings call, adding that people "are asking longer and more complex questions." A.I. is also changing how Google engineers work. More than a quarter of new code at Google is currently A.I.-generated, according to Pichai, who noted that the code is subsequently reviewed and accepted by employees. "This helps our engineers do more and move faster," the CEO said. Revenue from Google Cloud jumped 35 percent to $11.4 billion during the quarter. Alphabet's "Other Bets" division, which includes the self-driving company Waymo and the drone delivery service Wing, brought in $388 million in revenue, up from $297 million last year. Waymo, which earlier this month raised $5.6 billion to fund its expansion across the U.S., drives more than 1 million fully autonomous miles and completes more than 150,000 paid trips on a weekly basis, according to Pichai. Waymo currently operates in parts of San Francisco, Phoenix, Los Angeles and Austin. YouTube generated $8.9 billion in ad revenue during the quarter, representing a 12 percent increase year-over-year. The video platform is incorporating Google's Gemini A.I. model to improve recommendation and user experience. These models "have a deeper understanding of video content and viewers preferences" and "can recommend more relevant, fresher and personalized content to the viewer," said Philipp Schindler, Google's chief business officer, during the earnings call. Alphabet doubles down on A.I. investments Like other Big Tech players, Alphabet is spending furiously to keep up with its A.I. ambitions. The company's CapEx rose 62 percent year-over-year to $13 billion, with Alphabet predicting a similar figure for the next quarter. The majority of these investments went towards data centers, chips and other networking equipment. During the latest quarter, Alphabet announced $7 billion in planned data center investments alone -- $6 billion of which will take place in the U.S. To help meet the company's demand for power, it also recently unveiled plans to acquire nuclear energy from multiple reactors expected to eventually enable up to 500 megawatts, which Pichai described as part of Alphabet's "bold clean energy investments." Despite high-flying financial figures, Alphabet continues to face an array of challenges. Chief among them are ongoing antitrust claims from the U.S. Department of Justice (DOJ) over Google's alleged monopoly in online advertising. "We plan to vigorously defend these cases," Pichai told analysts, adding that "some of the early proposals from the DOJ, etc., have been far-reaching -- I think they could have unintended consequences, particularly to the dynamic tech sector and the American leadership there."

Alphabet's AI investments boost cloud sales, lift maturing ad business

Google parent Alphabet said on Tuesday that its AI investments were "paying off," as it reported a 35% surge in its cloud business and U.S. election-related spending lifted YouTube ad sales in the third quarter. Alphabet shares rose nearly 6% in after-market trading on Tuesday. Shares of Amazon and Microsoft, the top cloud companies, were up about 1% after hours. Alphabet topped third-quarter revenue and earnings expectations. Its mainstay Search business jumped 12% and as did revenue from YouTube ads.

Alphabet 'At The Forefront Of The AI Race': Analysts See Attractive Valuation; Highlight Cloud, YouTube, Search Results - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Alphabet has been spending aggressively on AI initiatives and it might be paying off, analysts say. Alphabet Inc GOOGGOOGL is viewed favorably by analysts after showing strength in cloud, search and YouTube segments and spending on AI initiatives paying off, after the company reported third-quarter financial results Tuesday. The Alphabet Analysts: BMO Capital analyst Brian Pitz reiterated an Outperform rating on Alphabet and raised the price target from $215 to $217. KeyBanc Capital Markets analyst Justin Patterson maintained an Overweight rating and raised the price target from $200 to $215. Cantor Fitzgerald analyst Deepak Mathivanan reiterated a Neutral rating with a $190 price target. JMP Securities analyst Andrew Boone reiterated a Market Outperform rating and raised the price target from $200 to $220. Seaport Research analyst Aaron Kessler upgraded the stock from Neutral to Buy and established a $200 price target. Needham analyst Laura Martin maintained a Buy rating with a $210 price target. Goldman Sachs analyst Eric Sheridan maintained a Buy rating and raised the price target from $208 to $210. Truist analyst Youssef Squali maintained a Buy rating and raised the price target from $220 to $225. Morgan Stanley analyst Brian Nowak maintained an Overweight rating and raised the price target from $190 to $205. Oppenheimer analyst Jason Helfstein maintained an Outperform rating and raised the price target from $185 to $215. Roth MKM analyst Rohit Kulkarni maintained a Buy rating with a $212 price target. Piper Sandler analyst Thomas Champion reiterated an Overweight rating and raised the price target from $200 to $210. BMO Capital on GOOGL: Surging cloud growth is a key storyline for Alphabet, Pitz said in a new investor note. The analyst also highlighted artificial intelligence use cases for Alphabet. "Cloud revenue accelerated once again on AI workloads and differentiated security offerings," Pitz said. Pitz said the company's search outlook improves thanks to AI initiatives like AI Overviews, Circle to Search and Lens. "Google has 20+ years of AI initiatives that are now being rolled out to its enterprise and SMB clients." KeyBanc on GOOGL: Alphabet reported solid search and cloud growth in the quarter, Patterson said in a new investor note. "In our view, Alphabet remains a case of the narrative vs. numbers," Patterson said. The analyst said there are concerns over the AI risk and regulation, but long-term revenue growth remains in place. "Believe patient shareholders will be rewarded." Cantor on GOOGL: Solid third-quarter figures might not be enough to shift narratives of bulls and bears, Mathivanan said. "The focus now shifts to Nov. 20, when the DOJ [U.S. Department of Justice] is expected to reveal remedies they seek in the antitrust trial," Mathivanan said. The analyst said Alphabet's "valuation is attractive" with shares trading at a price-to-earnings ratio of 20x based on fiscal 2025 estimates. The antitrust risks and AI-related risks keep the analyst on the sidelines. Read Also: Jim Cramer Says Google's AI Investment Next Year 'Should Be Fabulous For Nvidia' JMP on GOOGL: Stable search demand and accelerated cloud revenue were highlights from third-quarter results for Boone. "AI remained the key theme of the call as Google is rolling out AI Overviews to 100+ countries while Gemini is incorporated into all seven Google products with 2B+ monthly users," Boone said. The analyst said there remains concerns about a growing number of "search access points," including other tech companies, chatbots and social media. "With YouTube well positioned to capture the transition of linear TV dollars to CTV and cloud strength highlighted by this quarter's accelerating revenue, we continue to view Google as a net beneficiary of AI." Seaport on GOOG: Continued advertising momentum and accelerating cloud growth were key highlights in the quarterly results for Kessler. "We expect continued near-term strength driven in part by AI," Kessler said. The analyst said the U.S. Department of Justice investigations are an overhang, but the appeals process will likely take some time, eliminating the item as a near-term headwind. Needham on GOOGL: Vertical integration could be a theme for Alphabet as the company's generative AI initiatives hit several business lines, Martin said in a new investor note. The analyst said Google Search will benefit from GenAI as will other business lines. "We believe that GOOGL's primary upside valuation driver over the next 3-5 years will be its proprietary large language models," Martin said. Martin has been bullish on a potential breakup of Alphabet with the sum-of-the-parts valuation higher than the share price. The analyst estimates that YouTube could be worth $532 billion or $43 per share as a standalone business. "We believe that GOOGL is worth more in pieces than together, so we welcome regulators' attempts to break up GOOGL." "GOOGL is our top large-cap stock pick for 2024, owing to a strong macro backdrop, falling interest rates, record political ad spending, data advantages, and Generative AI integrations." Goldman Sachs on GOOGL: Strong operating momentum with long-term investments coming was a key theme for Sheridan in the company's third-quarter results. The analyst increased estimates for CapEx spending due to increased spending for artificial intelligence initiatives. Sheridan said the key question could be how the capex translates into sustained revenue growth. "We continue to view Alphabet as well-positioned against both the current and potential future computing landscapes," Sheridan said. Truist on GOOGL: Alphabet continues to invest in high-priority areas such as artificial intelligence, technology infrastructure and YouTube, Squali said in a new investor note. "We remain constructive on GOOGL following a broad-based beat across Search, Cloud and Devices with improving margins," Squali said. The analyst said Alphabet remains "at the forefront of the AI race," which could expand the company's total addressable market size for search and cloud and boost shareholder value. Morgan Stanley on GOOGL: Durable search business and better results from YouTube than expected were key quarterly highlights for Nowak. The analyst said the company's commentary on increased adoption, engagement and monetization from AI initiatives should give the market more confidence in the long-term outlook for the stock. "GOOGL also showcased how it is using GenAI to become more efficient and productive internally, and improving the cost to serve AI Overview queries," Nowak said. Oppenheimer on GOOG: Alphabet saw upside across all segments with AI driving upside, Helfstein said in a new investor note. The analyst said AI is helping to increase engagement and improving advertising intent for items like YouTube. Roth MKM on GOOGL: Alphabet's third-quarter results could make the stock a buy on the strength for investors, Kulkarni said in a new investor note. "We believe GOOGL has promise ahead with lasting benefits from this 'AI re-rating' as AI infrastructure broadens Search uses and monetization channels," Kulkarni said. The analyst highlighted strength in YouTube in the quarter, which has been the most streamed platform on TVs in the U.S. for 20 consecutive months. Piper Sandler on GOOGL: Alphabet's cloud segment and YouTube were the standouts in the third quarter for Champion. "Cloud op margin climbed to 17%, up from 11% last quarter and driven by a 57% incremental margin," Champion said. GOOGL/GOOG Price Action: GOOGL stock is up 4.05% to $176.53 on Wednesday versus a 52-week trading range of $122.69 to $191.75. Alphabet stock is up around 27% year-to-date in 2024. GOOG is up 4.14% at $178.22 versus a 52-week trading range of $123.93 to $193.30, and is up around 27% year-to-date in 2024. Read Next: Google Bought YouTube For $1.65B And Now It Prints $50B In Revenue Just In 1 Year -- Sundar Pichai Says Alphabet 'Leaning Into The Living Room Experience' Photo: Shutterstock Market News and Data brought to you by Benzinga APIs

Alphabet Beats Sales Estimates on Google Cloud Growth

(Bloomberg) -- Google parent Alphabet Inc. reported third-quarter sales that climbed more than analysts expected, helped by the growth of its cloud computing business. Revenue, excluding partner payouts, increased to $74.6 billion, surpassing the $72.9 billion analysts predicted on average, according to data compiled by Bloomberg. Net income was $2.12 per share, the company said Tuesday in a statement, compared with estimates of $1.84 per share. As its main search business matures, Google is betting on growth from its cloud division, which supplies computing power, software and services to other companies. Google is drawing more cloud customers using its artificial intelligence expertise to gain ground on larger rivals Amazon.com Inc. and Microsoft Corp., making inroads by signing on fast-growing AI startups -- some of which were founded by former Googlers -- as clients. "In cloud, our AI solutions are helping drive deeper product adoption with existing customers, attract new customers and win larger deals," Alphabet Chief Executive Officer Sundar Pichai said in the statement. Google shares rose more than 4% in extended trading following the report. The stock has gained 21% this year. Sales in the cloud division jumped to $11.4 billion, compared to the $10.8 billion analysts projected. Google is third in the market, after Amazon and Microsoft, but there is room for all three players to grow as companies invest in AI, Ido Caspi, a research analyst at Global X ETFs, wrote in an email. "Increasing enterprise AI workloads will continue to bolster cloud revenues," Caspi wrote.

Alphabet delivers on core products

Why it matters: Companies -- Big Tech in particular -- have been eager to strut their AI strategies to Wall Street. But those plans require big spending, and that cash has to come from somewhere. Catch up quick: Alphabet's search revenue, which made up 56% of the company's total, reached $49.4 billion in the third quarter, the company reported Tuesday night. Context: Alphabet has been a perfect study for the risk that AI poses to legacy platforms. That's why Google and others have been racing to boost their generative AI capabilities. What they're saying: CEO Sundar Pichai said the company's AI investments are "paying off." What we're watching: Meta, another digital advertising giant that has been investing heavily in AI, turned in its earnings report this afternoon showing slower revenue growth than the second quarter.

Google's AI-fuelled gains in cloud bode well for Amazon, Microsoft

The company's stock rose 5.5% in premarket trading on Wednesday, a day after Alphabet posted a 35% surge in Google Cloud revenue, the fastest pace of growth in eight quarters. Analysts expected a 29% rise, according to LSEG.Google-parent Alphabet's breakout cloud sales in the July-September quarter bode well for top cloud providers Microsoft and Amazon.com, and signal that market for AI-aided computing power is only growing. The company's stock rose 5.5% in premarket trading on Wednesday, a day after Alphabet posted a 35% surge in Google Cloud revenue, the fastest pace of growth in eight quarters. Analysts expected a 29% rise, according to LSEG. The company's mainstay ad sales business rose 10%. "When you see (Microsoft, Amazon) report this week, Google is probably going to have the most impressive cloud growth numbers out there," said Angelo Zino, senior equity analyst at CFRA Research. "It's probably going be the best of the three this quarter." Google's cloud business is much smaller than the other two, and accounted for 13% of its total third-quarter sales. A year earlier, it accounted for 11%. For Amazon, its cloud business AWS accounted for 18% of its revenue in the April-June quarter and Microsoft's Intelligent Cloud unit that houses Azure contributed 44% to overall revenue. "The continued growth of the Google Cloud business this quarter clearly reflects the company's capabilities in AI being recognized as a key driver in organizations choosing to work with Google," said Bob O'Donnell, president and chief analyst at TECHnalysis Research. This is the fourth straight quarter of growth reaccelerating in Google Cloud. The pace of growth had slowed for several quarters until the third quarter of 2023, which Alphabet at the time blaming "customer optimization efforts." While Google Cloud has less AI capacity than its peers, the company's focus on its powerful Tensor Processing Units - its custom chip for AI - and improved security has helped it differentiate itself from Azure and AWS, helping attract customers, said M Science analyst Charles Rogers. Like its rivals, Alphabet has been spending heavily on AI. Part of that is boosting its Search business to be a more capable competitor to Microsoft-backed OpenAI. It is also investing heavily in its cloud business, announcing plans to spend billions to open data centers across the world. Google has also integrated its generative AI chatbot Gemini into its cloud, bringing customers features ranging from AI-driven code generation, to data processing, and intelligence on cybersecurity threat risk. These investments are paying off. Customers have increased their spending on its AI services, including the Vertex AI platform that allows businesses to use the company's models as well as develop their own custom models. The company's new finance boss Anat Ashkenazi, who took over from Ruth Porat, said Alphabet's capital expenditures in 2025 would be higher than this year. "The Google Cloud business significantly exceeded expectations with meaningful acceleration and margin expansion," said Gil Luria, head of technology research at D.A. Davidson. "This has been the main area where Google has been able to translate its AI capabilities into revenue growth."

Google's AI-fuelled gains in cloud bode well for Amazon, Microsoft

Oct 30 (Reuters) - Google-parent Alphabet's (GOOGL.O), opens new tab breakout cloud sales in the July-September quarter bode well for top cloud providers Microsoft (MSFT.O), opens new tab and Amazon.com (AMZN.O), opens new tab, and signal that market for AI-aided computing power is only growing. The company's stock rose 5.5% in premarket trading on Wednesday, a day after Alphabet posted a 35% surge in Google Cloud revenue, the fastest pace of growth in eight quarters. Analysts expected a 29% rise, according to LSEG. The company's mainstay ad sales business rose 10%. "When you see (Microsoft, Amazon) report this week, Google is probably going to have the most impressive cloud growth numbers out there," said Angelo Zino, senior equity analyst at CFRA Research. "It's probably going be the best of the three this quarter." Google's cloud business is much smaller than the other two, and accounted for 13% of its total third-quarter sales. A year earlier, it accounted for 11%. For Amazon, its cloud business AWS accounted for 18% of its revenue in the April-June quarter and Microsoft's Intelligent Cloud unit that houses Azure contributed 44% to overall revenue. "The continued growth of the Google Cloud business this quarter clearly reflects the company's capabilities in AI being recognized as a key driver in organizations choosing to work with Google," said Bob O'Donnell, president and chief analyst at TECHnalysis Research. This is the fourth straight quarter of growth reaccelerating in Google Cloud. The pace of growth had slowed for several quarters until the third quarter of 2023, which Alphabet at the time blaming "customer optimization efforts." While Google Cloud has less AI capacity than its peers, the company's focus on its powerful Tensor Processing Units - its custom chip for AI - and improved security has helped it differentiate itself from Azure and AWS, helping attract customers, said M Science analyst Charles Rogers. Like its rivals, Alphabet has been spending heavily on AI. Part of that is boosting its Search business to be a more capable competitor to Microsoft-backed OpenAI. It is also investing heavily in its cloud business, announcing plans to spend billions to open data centers across the world. Google has also integrated its generative AI chatbot Gemini into its cloud, bringing customers features ranging from AI-driven code generation, to data processing, and intelligence on cybersecurity threat risk. These investments are paying off. Customers have increased their spending on its AI services, including the Vertex AI platform that allows businesses to use the company's models as well as develop their own custom models. The company's new finance boss Anat Ashkenazi, who took over from Ruth Porat, said Alphabet's capital expenditures in 2025 would be higher than this year. "The Google Cloud business significantly exceeded expectations with meaningful acceleration and margin expansion," said Gil Luria, head of technology research at D.A. Davidson. "This has been the main area where Google has been able to translate its AI capabilities into revenue growth." Reporting by Deborah Sophia in Bengaluru; Additional reporting by Kenrick Cai in San Francisco; Editing by Sayantani Ghosh and Mrigank Dhaniwala Our Standards: The Thomson Reuters Trust Principles., opens new tab

Google's AI-fuelled gains in cloud bode well for Amazon, Microsoft

(Reuters) - Google-parent Alphabet's breakout cloud sales in the July-September quarter bode well for top cloud providers Microsoft and Amazon.com, and signal that market for AI-aided computing power is only growing. The company's stock rose 5.5% in premarket trading on Wednesday, a day after Alphabet posted a 35% surge in Google Cloud revenue, the fastest pace of growth in eight quarters. Analysts expected a 29% rise, according to LSEG. The company's mainstay ad sales business rose 10%. "When you see (Microsoft, Amazon) report this week, Google is probably going to have the most impressive cloud growth numbers out there," said Angelo Zino, senior equity analyst at CFRA Research. "It's probably going be the best of the three this quarter." Google's cloud business is much smaller than the other two, and accounted for 13% of its total third-quarter sales. A year earlier, it accounted for 11%. For Amazon, its cloud business AWS accounted for 18% of its revenue in the April-June quarter and Microsoft's Intelligent Cloud unit that houses Azure contributed 44% to overall revenue. "The continued growth of the Google Cloud business this quarter clearly reflects the company's capabilities in AI being recognized as a key driver in organizations choosing to work with Google," said Bob O'Donnell, president and chief analyst at TECHnalysis Research. This is the fourth straight quarter of growth reaccelerating in Google Cloud. The pace of growth had slowed for several quarters until the third quarter of 2023, which Alphabet at the time blaming "customer optimization efforts." While Google Cloud has less AI capacity than its peers, the company's focus on its powerful Tensor Processing Units - its custom chip for AI - and improved security has helped it differentiate itself from Azure and AWS, helping attract customers, said M Science analyst Charles Rogers. Like its rivals, Alphabet has been spending heavily on AI. Part of that is boosting its Search business to be a more capable competitor to Microsoft-backed OpenAI. It is also investing heavily in its cloud business, announcing plans to spend billions to open data centers across the world. Google has also integrated its generative AI chatbot Gemini into its cloud, bringing customers features ranging from AI-driven code generation, to data processing, and intelligence on cybersecurity threat risk. These investments are paying off. Customers have increased their spending on its AI services, including the Vertex AI platform that allows businesses to use the company's models as well as develop their own custom models. The company's new finance boss Anat Ashkenazi, who took over from Ruth Porat, said Alphabet's capital expenditures in 2025 would be higher than this year. "The Google Cloud business significantly exceeded expectations with meaningful acceleration and margin expansion," said Gil Luria, head of technology research at D.A. Davidson. "This has been the main area where Google has been able to translate its AI capabilities into revenue growth." (Reporting by Deborah Sophia in Bengaluru; Additional reporting by Kenrick Cai in San Francisco; Editing by Sayantani Ghosh and Mrigank Dhaniwala)

Google's AI Push Drives Record Cloud Revenue

"Alphabet is the first major tech company to report earnings this season, and it hasn't disappointed," said Matt Britzman, a senior equity analyst at Hargreaves Lansdown. He further added, "The strong cloud growth reinforces the notion that leading cloud providers are well-positioned to thrive amid the AI revolution." Moreover, fears that Google was in an AI world that was much ahead of its competitors such as Microsoft had not mattered much as seen by its earnings report. The company had been working hard to develop Gemini, a chatbot that it unveiled at the last I/O and fine-tune its search algorithms on AI. The new Chief Financial Officer Anat Ashkenazi said that there would be a rise for the next year also, after having surged by 62 percent last year to US$13 billion.

Google's profits beat expectations on strong cloud computing growth

Alphabet's profit jumped 34 per cent in the third quarter, as the search giant reported strong growth in cloud computing amid robust demand for data centres and advanced chips used to train and run generative artificial intelligence models. Net income was $26.3bn compared with $19.7bn in the same period a year earlier, exceeding analysts' expectations for $22.8bn, the parent company of Google reported on Tuesday. Revenue rose 15 per cent to $88.3bn in the three months through to the end of September, beating analysts' estimate for $86.3bn. The standout unit was Google Cloud, whose revenue increased 35 per cent to $11.4bn. Revenue at the company's core search and advertising businesses, including YouTube, rose 10 per cent to $65.9bn. "We generated strong revenue growth in the quarter, and our ongoing efforts to improve efficiency helped deliver improved margins," said chief executive Sundar Pichai. "In Cloud, our AI solutions are helping drive deeper product adoption with existing customers, attract new customers and win larger deals." The shares rose 4 per cent in after-hours trading. Alphabet stock had previously gained 22 per cent this year, giving it a market capitalisation of $2.1tn and making it the fourth most valuable listed company in the world behind Apple, Nvidia and Microsoft.

Google's moneymaking machine still pumping out massive profits despite multiple threats

Google is still thriving while the company navigates through a pivotal shift to artificial intelligence and battles regulators trying to topple its internet empire. The latest evidence of Google's prosperity emerged Tuesday with the release of its corporate parent Alphabet Inc.'s results for the July-September period. Both Alphabet's profit and revenue increased at a brisker pace than industry analysts anticipated, thanks primarily to a moneymaking machine powered by Google's ubiquitous search engine. Alphabet earned $26.3 billion, or $2.12 per share during the most recent quarter, a 34% increase from a year ago. Revenue rose 15% from the same time last year to $88.27 billion. "Our commitment to innovation as well as the long-term focus and investment in AI are paying off," Alphabet CEO Sundar Pichai said during a call discussing the results. The profits would have been even higher if Google wasn't pouring so much money into building up its AI arsenal in a technological arms race that includes other industry heavyweights Microsoft, Amazon, Apple, Facebook parent Meta Platforms and rising star OpenAI. The AI investments are the primary reason Google's capital expenditures in the past quarter soared 62% from the same time last year to $13.1 billion. The AI spending will likely stay at roughly the same level during the current October-December period, and the rise even higher next year, according to Anat Ashkenazi, Alphabet's chief financial officer. But Ashkenazi also emphasized the Mountain View, California, company will act on cost-cutting opportunities in other areas to help boost profits. Alphabet already has trimmed its payroll from more than 190,000 worldwide employees early last year to about 181,000 workers now. Investors seemed pleased with the both the performance and what they heard from company executives. Alphabet's stock price climbed 5% in extended trading after the numbers came out and the conference call was completed. Investing.com analyst Thomas Monteiro said Alphabet's showing makes it likely more good news will be coming for Big Tech as this week progresses, with quarterly reports from Microsoft, Meta, Amazon and Apple still to come in the days ahead. But a 4-year-old antitrust case brought by the U.S. Department of Justice has cast a cloud of uncertainty over Google's future. After weighing the evidence presented during a high-profile trial last year, a federal judge declared Google's search engine is an illegal monopoly -- a decision that has opened the door for a major shake-up. Earlier this month, the Justice Department suggested it might seek to break up Google as part of penalties that will be determined by U.S. District Judge Amit Mehta next summer. Besides the legal assault on its search engine, Google also has been ordered to tear down the barriers protecting its Play Store for Android smartphone apps. That ruling came earlier this month after a jury decided that operation also was an illegal monopoly. Google is also nearing the end of another antitrust trial in Virginia revolving around the technology underlying its digital ad network. As if the regulatory headaches aren't enough, Google is also in the midst of a major makeover of its search engine that is putting an increasing emphasis on highlight results produced by artificial intelligence in response to competitive threats to alternative options relying on the same potentially revolutionary technology. For now, at least, Google remains a juggernaut. The digital ads tied to Google's search engine remained the financial cornerstone. Revenue from that segment climbed 12% from a year ago to $49.39 billion. And Google's cloud division is growing at an even more robust rate, thanks to demand for AI services. The cloud division generated $11.35 billion in revenue during the past quarter, a 35% increase from last year. But the regulatory questions dogging Google remain a worry among investors. Although Alphabet's shares have surged by more than 20% so far this year, Tuesday's closing price of $169.68 remains well below their high of nearly $192 reached in July before the search engine monopoly ruling came out.

Google CEO Says AI Investments Are 'Paying Off'

After Google parent Alphabet (GOOGL) reported third-quarter earnings that topped analysts' expectations, CEO Sundar Pichai and other executives told investors the tech giant is seeing strong gains from demand for artificial intelligence (AI), sending shares up over 5% in extended trading Tuesday. Pichai told investors the tech giant's investments in AI "are paying off and driving success," with strong performance in Google's search and cloud divisions driven by AI demand. Google Cloud's third-quarter revenue surged a whopping 35% year-over-year to $11.4 billion, led by growth in its AI infrastructure and generative AI solutions, along with other core cloud products. Pichai added he believes the company could be "uniquely positioned to lead in the era of AI," with its focus on the emerging tech. "For all these AI features, it's just the beginning. You'll see a rapid pace of innovation and progress here," he said. Pichai noted the company has seen use of Google Search rise among people who use its AI overviews and that Google Lens is drawing 20 billion visual searches each month. Chief Business Officer Philipp Schindler said the company's new AI-powered features "make searches more helpful, and we continue to see great feedback, particularly from younger users." CFO Anat Ashkenazi, who took over the role in July, suggested the company expects its advances with AI could "translate to revenue in the fairly short term." Alphabet invested $13 billion in capital expenditures during the quarter, and Ashkenazi said investors could expect a similar figure in the fourth quarter, with an increase in 2025 as the company ramps up spending on AI. "This is an area that requires investment," Ashkenazi said, adding the company's moves are "based on demand we're seeing from customers."

Google 'moving in a good direction': What analysts are saying after tech giant's strong earnings

Major Wall Street banks remain bullish on Alphabet following the tech titan's strong third-quarter results . On Tuesday, Google's parent company reported earnings of $2.12 per share, while analysts polled by LSEG had predicted $1.85 per share. The company's revenue grew 15% year over year to $88.27 billion, more than the same quarter last year and the $86.30 billion analysts had anticipated. Shares of Alphabet popped about 6% on the back of the results. GOOGL YTD mountain GOOGL YTD chart Analysts from major Wall Street shops including Barclays, Citi, JPMorgan, Bank of America, Goldman Sachs and Morgan Stanley all reiterated their overweight or buy-equivalent rating on the stock Here were the analysts' latest price targets. Alphabet's Class A shares closed at $169.68 on Tuesday afternoon. Barclays: Raised to $220 from $200, new forecast implies 29% upside Citi: Raised to $216 from $212, new forecast implies 27% upside JPMorgan: Raised to $212 from $208, new forecast implies 25% upside Bank of America: Raised to $210 from $206, new forecast implies 24% upside Goldman Sachs: Raised to $210 from $208, new forecast implies 24% upside Morgan Stanley: Raised to $205 from $190, new forecast implies 21% upside "Almost everything is moving in a good direction for GOOGL, with the AI story progressing, a stable macro for digital ads, strong cost controls despite infra investments, and solid FCF," wrote Barclays analyst Ross Sandler. "We think shares could remain choppy as we work through the Search remedies, given the large impact zone, but performance in 3Q was solid." Although Alphabet has been threatened by near-term disruption risks such as regulatory overhangs, analysts believe that the firm's generative artificial intelligence strength is enough to outweigh these headwinds. "A frequent discussion w/investors into earnings was whether Google could post a quarter that would shift the narrative from the search trial w/the DOJ & enable the stock to break out -- we think this one comes pretty close," said JPMorgan analyst Doug Anmuth. Meanwhile, Goldman Sachs' Eric Sheridan also commended the firm for its strong investment cycle, which includes investments into Google's Cloud infrastructure and more AI deployment through its application ecosystem. "How this compounded capex translates into returns / sustained revenue growth (with early positive proof points in Q3) will likely remain a key debate for investors going forward," he added.

Why Analysts Are Bullish on Google Parent Alphabet After Earnings

Google parent Alphabet (GOOGL) posted third-quarter earnings that topped Street expectations and showed artificial intelligence (AI) progress, with both JPMorgan and Citigroup analysts noting the tech giant's strong Google Cloud revenue. JPMorgan raised its price target for Alphabet to $212 from $208 and reiterated an "overweight" rating. The broker noted "Google's increased confidence" in the rollout of its AI search business; its strong cloud business, with 35% year-over-year revenue growth in the quarter; and upside for operating profits given the company's plans to "re-engineer the cost structure" as reasons behind the increased price target. JPMorgan analysts said that Google's AI Overviews service -- its AI-generated search summaries -- is being rolled out to 100 new countries and territories with a reach of more than a billion users per month, and is "monetizing at roughly the same rate as non-AI searches" in terms of advertising. On the company's earnings call, Alphabet Chief Executive Officer (CEO) Sundar Pichai said the company has seen use of Google Search rise among people who use AI Overviews, and that Google Lens is drawing 20 billion visual searches each month. Citi analysts stuck with their "buy" rating and $212 price target for Alphabet. The broker, like JPMorgan, noted Google Cloud's "accelerating growth from greater GenAI demand," thanks in part to Alphabet's Gemini large language model. Shares of Alphabet jumped more than 5% Wednesday afternoon and have gained 28% this year.

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Google-parent Alphabet says its big bet on AI is paying off Google parent Alphabet said on Tuesday its AI investments were "paying off" as it reported a 35% surge in its cloud business. Julian Satterthwaite reports.

Alphabet shares reiterated buy rating on strong cloud growth By Investing.com

On Wednesday, Alphabet (NASDAQ:GOOGL) Inc. (NASDAQ:GOOG) retained its Buy rating and $220.00 stock price target from TD Cowen. The firm's analysis highlighted Alphabet's revenue outperforming consensus estimates, with a notable 2.2% increase. This uptick was attributed to significant gains in the Cloud division as well as the Subscriptions, Platforms, and Devices segments. Alphabet's operating income (GAAP) also surpassed expectations, coming in 8% higher than the consensus. Alphabet's Cloud revenue, which soared by 35% year-over-year, marked its most rapid expansion in two years. This growth was partly fueled by the company's advancements in Generative AI. The Search segment also saw positive trends, with AI Overviews contributing to increased user engagement. These strong performances have prompted TD Cowen to adjust long-term estimates for revenue, EPS, and capital expenditures upward. Following the announcement, Alphabet's stock experienced a 6% increase in after-hours trading, reflecting investor optimism spurred by the company's strong financial metrics and growth prospects. The endorsement of the firm's long-term potential remains steadfast, with the reaffirmed Buy rating and $220 price target indicating confidence in Alphabet's ongoing strategies and market positioning. In other recent news, Alphabet announced robust Q2 2024 results, revealing a significant 14% year-over-year increase in total revenues, which reached $84.7 billion. This growth was largely attributed to the company's Search and Cloud services. The earnings call highlighted the role of artificial intelligence (AI) initiatives in Alphabet's performance, particularly the Gemini AI model, which is used by over 1.5 million developers. Google Cloud revenue surpassed $10 billion for the first time, with a $1 billion operating profit. The call also noted the departure of CFO Ruth Porat, who will be succeeded by Anat Ashkenazi. Looking forward, Alphabet anticipates strong advertising revenue, particularly from APAC retailers, and expects the Made by Google hardware launches to enhance revenues. The company also foresees a full-year 2024 operating margin expansion, despite anticipated Q3 challenges. Despite these positive developments, Alphabet reported a 5% decline in network revenues and anticipates pressure on Q3 margins due to increased depreciation and expenses linked to hardware launches. Nonetheless, the company remains optimistic about future growth in advertising, subscriptions, and cloud services, underpinned by its ongoing investment in AI infrastructure. Alphabet's strong financial performance, as highlighted in the article, is further supported by real-time data from InvestingPro. The company's revenue for the last twelve months as of Q2 2024 stands at an impressive $328.28 billion, with a robust revenue growth of 13.38% over the same period. This aligns with the article's mention of revenue outperforming consensus estimates. InvestingPro Tips reinforce Alphabet's financial strength. The company "holds more cash than debt on its balance sheet," which provides financial flexibility to invest in growth areas like Cloud and AI, as mentioned in the article. Moreover, Alphabet is "trading at a low P/E ratio relative to near-term earnings growth," with a current P/E ratio of 24.16. This suggests that despite the recent stock price increase, there may still be room for further appreciation, supporting TD Cowen's $220 price target. For investors seeking a deeper understanding of Alphabet's financial position, InvestingPro offers 11 additional tips, providing a comprehensive view of the company's market standing and potential.

Alphabet shares target raised by Evercore ISI, reflecting 'solid Q3 beat' By Investing.com

On Wednesday, Evercore ISI, a prominent investment firm, increased its price target on shares of Alphabet (NASDAQ:GOOGL) to $205 from the previous target of $200. The firm maintained its Outperform rating on the stock, signaling confidence in the company's prospects. The adjustment follows Alphabet's recent earnings report, which showcased a robust third-quarter performance, surpassing Wall Street's revenue expectations across various segments. Additionally, the company reported operating margins that were significantly above analyst forecasts. The Evercore ISI analyst acknowledged concerns surrounding the ongoing Department of Justice (DOJ) search trial involving Alphabet but expressed a positive outlook on the company's position in the artificial intelligence (AI) landscape. The analyst's comments highlighted Alphabet's ability to make a convincing argument for its continued leadership in the AI era, which addresses some of the skepticism about the company's long-term value. In closing their assessment, Evercore ISI concluded their Tactical Outperform call, effectively wrapping up their highly favorable recommendation for Alphabet's stock based on the latest financial data and market performance. In other recent news, Alphabet Inc. has been making significant strides in its financial performance and strategic investments. The company's recent earnings report surpassed consensus estimates for both revenue and earnings per share, with figures that were 2% and 15% higher than what analysts had anticipated. This was largely due to the impressive 35% year-over-year surge in Google Cloud's revenue, indicating a strong demand for Alphabet's enterprise AI tools and a broader increase in cloud demand. Citi maintained its Buy rating on Alphabet, while Barclays (LON:BARC) maintained an Overweight rating, and RBC Capital and Goldman Sachs (NYSE:GS) also maintained positive ratings. However, these firms also cautioned about potential regulatory challenges and competition in the GenAI space. In addition to its financial performance, Alphabet led a $110 million investment in Nigerian fintech company Moniepoint, pushing the company's valuation beyond the $1 billion mark. Alphabet's new finance chief, Anat Ashkenazi, also announced that the company's capital expenditures in 2025 would exceed this year's. These recent developments highlight Alphabet's robust financial performance and strategic focus on AI and cloud services, despite potential regulatory challenges. Alphabet's strong financial position and market performance are further underscored by recent data from InvestingPro. The company's market capitalization stands at an impressive $2.1 trillion, reflecting its dominant position in the tech industry. With a P/E ratio of 24.38, Alphabet's stock is trading at a reasonable valuation considering its growth prospects. InvestingPro Tips highlight Alphabet's financial strength, noting that the company "holds more cash than debt on its balance sheet" and that its "cash flows can sufficiently cover interest payments." These factors align with Evercore ISI's positive outlook on the company's future. Moreover, Alphabet's revenue growth of 13.38% over the last twelve months and a robust EBITDA growth of 34.59% support the analyst's confidence in the company's performance. The stock's one-year total return of 36.67% further validates the market's positive sentiment towards Alphabet. For investors seeking a deeper understanding of Alphabet's potential, InvestingPro offers 11 additional tips, providing a comprehensive analysis of the company's financial health and market position.

Alphabet stock target raised, outperform on strong cloud, search growth By Investing.com

On Wednesday, BMO Capital Markets has adjusted its stock price target for Alphabet Inc (NASDAQ: NASDAQ:GOOGL), increasing it slightly to $217 from the previous $215, while retaining an Outperform rating on the shares. This adjustment reflects the company's robust performance in key business areas. The analyst from BMO Capital Markets highlighted that Alphabet's cloud revenue has seen another acceleration, driven by artificial intelligence (AI) workloads and security offerings that stand out in the market. Moreover, the company's search monetization efforts are yielding results beyond expectations, with additional growth anticipated from AI Overview Ads on mobile, which is expected to expand globally after 2025. Alphabet's video platform, YouTube, has also shown promising signs of growth. The improved outlook is attributed to the enhancements in monetizing YouTube Shorts, the platform's short-form video feature. This is seen as a positive development for Alphabet's revenue diversification. Further observations by the analyst include a moderation in capital expenditures (CAPEX) on a quarter-over-quarter basis, a trend that is projected to continue into 2025. The revised CAPEX estimates for Alphabet are now set at $57 billion for 2024 and $63 billion for 2025, up from the previous forecasts of $55 billion and $60 billion, respectively. In summary, the analyst reaffirmed the Outperform rating for Alphabet and raised the estimates and target price to $217, citing the company's strong performance in cloud and search, as well as the potential for future growth in these areas. In other recent news, Alphabet Inc. has been the center of several positive adjustments by analysts following robust third-quarter earnings. Piper Sandler raised Alphabet's price target from $200 to $210, emphasizing the company's mid-teens revenue growth and the strong performance of its Cloud services and YouTube subscriptions. Similarly, Truist Securities and Canaccord Genuity upgraded Alphabet's price target to $225, highlighting the company's growth in its Search, Cloud, and Devices segments. Cantor Fitzgerald maintained a Neutral rating with a consistent price target of $190, citing potential risks associated with antitrust litigation and AI-related challenges. The company's third-quarter earnings exceeded expectations, driven by the strength of Alphabet's cloud business and YouTube advertising sales. Significant advancements in artificial intelligence (AI) have also contributed to the growth of its Cloud and YouTube segments. Alphabet's investments in AI and YouTube were particularly noted as key growth drivers by analysts. In addition, Alphabet recently led a $110 million investment in Nigerian fintech firm Moniepoint. Despite these positive developments, analysts from multiple firms cautioned about potential regulatory challenges and competition in the AI space. These are the recent developments for Alphabet Inc., providing investors with valuable insights into the company's performance and potential future growth. Complementing BMO Capital Markets' optimistic outlook on Alphabet Inc (NASDAQ: GOOGL), recent data from InvestingPro reinforces the company's strong market position and financial health. With a substantial market capitalization of $2.1 trillion, Alphabet continues to be a dominant force in the tech industry. InvestingPro Tips highlight that Alphabet holds more cash than debt on its balance sheet, indicating robust financial stability. This aligns with the analyst's observations on moderated capital expenditures, suggesting prudent financial management. Moreover, the company's P/E ratio of 24.38 is considered low relative to its near-term earnings growth, potentially signaling an attractive valuation for investors. Alphabet's revenue growth of 13.38% over the last twelve months, coupled with a strong EBITDA growth of 34.59%, underscores the company's ability to expand its business and improve profitability. This growth trajectory supports BMO's positive stance on Alphabet's cloud and search performance. For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips on Alphabet, providing deeper insights into the company's financial health and market position.