Google's Q1 Earnings Surge: AI and Cloud Drive Growth Amid Challenges

Alphabet shares gain as Google search boosts profits

Alphabet shares rose after it reported first-quarter profit surged 46 per cent, driven by another strong performance in its search business and a boom in artificial intelligence-related demand for cloud computing power. Net income jumped to $34.5bn compared with $23.7bn in the same three month period a year earlier, the parent company of Google reported on Thursday. Google's core search and advertising business grew almost 10 per cent to $50.7bn in the quarter, surpassing estimates for between 8 and 9 per cent. The cloud computing division reported a 28 per cent surge in revenue to $12.3bn, showing continued demand for its data centre and network services from the boom in AI. However, this slowed from 30.1 per cent in the prior quarter. "Search saw continued strong growth, boosted by the engagement we're seeing with features like AI Overviews," said chief executive Sundar Pichai, referring to AI-generated answers it now shows at the top of many results pages. "Cloud grew rapidly with significant demand for our solutions." Alphabet shares rose about 4 per cent in after-market trading. Google is the second Big Tech company to report earnings in the wake of US President Donald Trump's global trade war. Alphabet shares have fallen about 17 per cent this year. Like most of its rivals, the company has been affected by concerns about tariffs disrupting supply chains and softening consumer spending, promoting fears of a US recession. Revenues rose 12 per cent to $90.2bn in the three months to the end of March. Earlier this week, Tesla warned that tariffs would have an "outsized" impact on its battery business that relies on components from China. Chief executive Elon Musk pledged to continue to lobby Trump in favour of free-trade principles. Alphabet's spending on data centres, chips and other AI infrastructure continued to escalate. First-quarter capital expenditure jumped to $17.2bn, up from $12bn last year and slightly more than the $17.1bn estimate. The company has forecast spending will reach $75bn this year, up from $53bn in 2024. Alphabet also said it would buy back $70bn of shares.

Google's parent begins year with robust growth despite legal, competitive and economic threats

Google's profits soared 28% in this year's opening quarter, overcoming the competitive and legal threats that its internet empire is facing amid an economy roiled by a global trade war. The numbers released Thursday by Google parent Alphabet Inc. indicated the company is rising to the challenge so far, but investors are likely to remain concerned about the turbulent times ahead. The Mountain View, California, company earned $26.5 billion, or $2.15 per share, during the January-March period, up from $20.7 billion, or $1.64 per share, at the same time last year. Revenue rose 12% from last year to $96.5 billion. The results easily exceeded analysts' projections, according to FactSet Research. Alphabet's stock gained more than 3% in extended trading after the numbers came out. The shares had fallen by 16% since the end of last year. Google's first-quarter performance illustrated the continuing power of its long-dominant search engine in a sea of uncertainty. While grappling with competitive threats emerging as artificial intelligence reshapes technology, Google is also battling court decisions condemning its search engine and digital ad network as illegal monopolies. The AI-driven upheaval has opened new opportunities for people to find helpful advice, insights and information through more conversational search options from the likes of OpenAI and Perplexity. Google's long-dominant search engine is countering the new competition with a feature called AI Overviews that appear above web links in its results. It is also testing a conversational tool called AI Mode that would usher in an even more radical change to its business model. Meanwhile, Google is trying to fend off an attempt by the U.S. Justice Department to break up the company and impose other restraints after a federal judge last year branded its search engine an illegal monopoly. To make matters worse, its digital ad network also was found to be illegally abusing its power earlier this month in another case brought by the Justice Department. President Donald Trump's trade war has injected more uncertainty into the mix by rattling the financial markets amid fears the tariffs will reignite inflation while dragging the economy into a recession. Although Google's digital services aren't directly impacted by the tariffs, a recession would likely curtail the spending on ads that generate most of Alphabet's revenue. But there were few signs of a slowdown in the past quarter, emboldening the company to stand firm on plans to invest $75 billion on AI and other technologies this year while also pursuing approval of a $32 billion deal to buy cybersecurity firm Wiz. "We are confident about the opportunities ahead," Alphabet CEO Sundar Pichai said in a statement.

Google parent Alphabet beat Wall Street expectations in first-quarter earnings

No need to pull up your browser to search "strong quarter" -- Google (GOOGL+1.23%) parent Alphabet has the answer. The company beat Wall Street's consensus expectations in its first-quarter earnings report, which were released Thursday after the bell. It's the first of the trillion-dollar Big Tech companies to report. Alphabet posted a 12% revenue growth year-over-year -- specifically, $90.2 billion in revenue, beating Wall Street's estimate of $89.2 billion. First-quarter sales (excluding partner payouts) were $76.5 billion, a little over a billion more than the Street's expectation. Google reported earnings per share of $2.81; analysts were expecting that number to be $2.01. Net income increased 46% The stock popped more than 3% after the market closed on the news. The company was largely buoyed by its advertising revenue, Google Cloud platform, and AI efforts. Ad revenue was $66.8 billion (versus an expected $66.4 billion). Google Cloud revenue increased 28% -- led by growth across the platform's cloud and AI offerings -- but slightly missed expectations ($12.2 billion versus an expected $12.3 billion). CEO Sundar Pichai said in the report that he was "pleased with our strong Q1 results, which reflect healthy growth and momentum across the business." "Underpinning this growth is our unique full stack approach to AI," he said. "This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation. Search saw continued strong growth, boosted by the engagement we're seeing with features like AI Overviews, which now has 1.5 billion users per month. Driven by YouTube and Google One, we surpassed 270 million paid subscriptions. And Cloud grew rapidly with significant demand for our solutions."

Google Cloud, AI, ads, Waymo, and more: Google earnings takeaways

Google's parent company, Alphabet (GOOGL), was a big winner on Wall Street this week, delivering first-quarter earnings that largely surpassed expectations -- and highlighted momentum across its search, cloud, and AI businesses. The report sent investors a strong signal that the company is weathering macroeconomic headwinds with diversified growth and continued strength in its core businesses. Fueled by growth in cloud services and AI, Alphabet posted a net income of $34.5 billion on $90.2 billion in revenue -- a 12% year-over-year increase that beat Wall Street's estimate of $89.2 billion. The company also reported earnings per share of $2.81; analysts were expecting that number to be $2.01. Net income increased 46%. The company also announced a $70 billion stock-buyback program and said it will increase its quarterly cash dividend by 5% to $0.21. The stock popped in after-hours trading and continued to rise Friday -- 1.6% around midday -- buoyed by better than-expected revenue, margin expansion, and bullish sentiment from analysts who noted broad-based strength and Google's early success in monetizing its AI tools. "We are so back," Wedbush analysts said about Alphabet's earnings. Google Search continues to be Alphabet's revenue anchor. It's the company's largest ad segment, and its revenue grew almost 10% year over year to $50.7 billion, slightly ahead of the Street's estimates. Part of that engagement is being driven by Google's generative AI Overviews tool, which is bolted atop the company's search results, making it virtually unavoidable. CEO Sundar Pichai said AI Overviews "now has 1.5 billion users per month" and expanded in the first quarter to more than 15 languages across 140 countries. The company also launched "AI mode" in March for more complex queries, which Google said has received positive user feedback. According to William Blair analysts, Alphabet is in a "good, positive cycle for search with AI," with strong engagement trends and growing traction from new tools. While investors had been wary about whether AI-driven search results would be less profitable than traditional search results, chief business officer Philipp Schindler said on the earnings call that the company is monetizing AI Overviews "at approximately the same rate." Schindler also said that AI is helping Google's ad business better match ads to searches -- letting marketers "reach customers and searches where we would not previously have shown their ads." The company's ad revenue was $66.8 billion (versus an expected $66.4 billion). William Blair noted that "this quarter is the largest expansion for AI overviews, with new users and more responses," and said advertisers using demand-generation tools -- a key driver of AI-powered ad personalization -- are seeing a 26% year-over-year boost in conversions. Wedbush analysts were similarly upbeat, noting that "advertising trends were healthy to start the year." They pointed out that first-quarter Google Search revenue growth exceeded consensus by roughly 40 basis points and that the company didn't call out any signs of softening ad backdrop, "likely tempering some investor concern in the near-term." Morningstar analysts said they were particularly impressed with the "wide range of monetization angles the firm is creating by leveraging AI, including Google Cloud, Gemini, AI Overviews, and improved ad targeting tools provided to advertisers." On the earnings call, Pichai highlighted the company's recently released Gemini 2.5 AI model, which he called "an extraordinary foundation for our future innovation" in the report. The updated model, integrated across Google products and Google Cloud, is powering features such as AI Overviews and advanced developer tools. While Gemini's user count has grown substantially, it still lags behind OpenAI's ChatGPT and Meta AI (META). Google Cloud remained one of the fastest-growing -- and most important -- segments in Alphabet's portfolio. Google Cloud now holds the third-largest market share in the global cloud infrastructure space, behind Amazon Web Services (AMZN) and Microsoft Azure (MSFT). But Google's cloud services growth seems to be outpacing the rest of the sector. Revenue reached $12.3 billion, up 28% year over year, just about matching analysts' expectations. The segment's profitability improved significantly, and operating income was up 142%. Those numbers were driven by strong growth across both core and AI-specific products. The company said demand continues to outpace capacity, reinforcing the need for continuing infrastructure investment. Alongside Thursday's earnings, the company reiterated plans to invest approximately $75 billion in capital expenditures in 2025, much of that dedicated to AI infrastructure and data centers to support workloads. Wedbush called Cloud's revenue growth "encouraging" and noted that "the more aggressive pace of investment should alleviate capacity constraints as AI demand continues to scale." Alphabet's autonomous driving company, Waymo, also had a big quarter. The company said it's providing 250,000 paid robotaxi rides a week -- five times what it did a year ago -- and has expanded operations across San Francisco, Phoenix, Los Angeles, and Austin. Further launches in Atlanta, Miami, and Washington, D.C. are planned. At the moment, Waymo remains a small contributor to Alphabet's bottom line, but it's drawing increased investor interest. "This is probably the first question I've got on an earnings call on Waymo," Pichai joked in a Q&A session after the quarterly earnings report was released. "It's a sign of progress." He then suggested that Waymo's self-driving robotaxis might be available for purchase -- but didn't offer a timeline or any detail beyond saying "there is future optionality for personal ownership." Despite the strong quarter, Google faces big regulatory risks, which the company didn't comment on during its earnings call. Two antitrust cases -- that have both already been decided in the government's favor -- are entering the remedy phase of their trials, with potential outcomes ranging from enforced data sharing to a company breakup. The search engine giant was back in court this week, related to a ruling that found the company has an illegal monopoly in online search -- in part by paying web browsers and smartphone manufacturers to feature its search engine. And the DOJ told the judge it had an eyebrow-raising solution: forcing the company to sell its popular Chrome browser. In a separate antitrust case, a federal judge ruled that the company had illegally maintained a monopoly in some of its online advertising technology, which could result in regulatory fines or structural changes to how Google's ad business operates -- and maybe even a break-up. And Japan's FTC recently sent the company a cease-and-desist order after it said Google's search practices were monopolistic. Alphabet also acknowledged that changes to the U.S.' "de minimis" trade exemption could pressure the company's ads business, primarily among Asia Pacific-based retailers such as Temu and Shein. Google executives said it's still too soon to determine the full effects of the current macroeconomic volatility -- but said there could definitely be signs of weakness in an area of spending that had been robust until recently. "I mean, we're obviously not immune to the macro environment, but we wouldn't want to speculate about potential impacts beyond noting that the changes to the de minimis exemption will obviously cause slight headwind to our ads business in 2025, primarily from APAC-based retailers," chief business officer Schindler said on the earnings call. He added that Google is well-versed in navigating periods of uncertainty. Alphabet has traditionally chosen not to provide specific forecasts for revenue or earnings. When chief financial officer Anat Ashkenazi made a presentation three months ago, she didn't mention the looming trade war or macroeconomic uncertainty -- she didn't mention them on Thursday's call, either. Wedbush moved its consolidated estimates higher -- second-quarter revenue of $91.9 billion (up 8.5% year over year) and 2025 operating income of $123.2 billion, up 4% from the firm's prior forecasts. Its 2025 revenue estimate now stands at $383.1 billion, up 9.5% year over year and up 2% from its previous estimate. "While we remain cautious across the group, we are incrementally constructive on the potential outcomes for this year," analysts wrote. They also said they see "a case for multiple expansion in the coming quarters."

Alphabet quarterly earnings lifted by cloud and AI

San Francisco (AFP) - Google parent Alphabet on Thursday reported profit of $34.5 billion in the recently ended quarter, powered by its cloud computing and artificial intelligence operations. Overall revenue at Alphabet grew 12 percent to $90.2 billion compared to the same period a year earlier, while revenue for the cloud unit grew 28 percent to $12.3 billion, according to the tech giant. Alphabet chief executive Sundar Pichai said the strong quarterly results reflect healthy growth and momentum across the business. "Underpinning this growth is our unique full stack approach to AI," Pichai said in an earnings release. He touted the latest Gemini software as Alphabet's most intelligent AI model and an "extraordinary foundation" for the Silicon Valley company's innovation. Alphabet shares were up more than three percent in after-market trades that followed release of the earnings figures. "Cloud grew rapidly with significant demand for our solutions," Pichai said of Alphabet's services and tools hosted at data centers. Investors have been watching closely to see whether the tech giant may be pouring too much money into artificial intelligence. Google and rivals are spending billions of dollars on data centers and more for AI, while the rise of lower-cost model DeepSeek from China raises questions about how much needs to be spent. Antitrust battles Meanwhile the online ad business that churns out the cash Google invests in its future could be neutered due to a defeat in a US antitrust case. US government attorneys are urging a federal judge to make Google spin off its Chrome browser, arguing artificial intelligence is poised to ramp up the company's online search dominance. The Department of Justice (DOJ) is arguing its position before District Judge Amit Mehta, who is considering "remedies" after making a landmark decision last year that Google maintained an illegal monopoly in online search. "Nothing less than the future of the internet is at stake here," Assistant Attorney General Gail Slater said prior to the start of the hearings this week in Washington. "If Google's conduct is not remedied, it will control much of the internet for the next decade and not just in internet search, but in new technologies like artificial intelligence." Google countered in the case that the United States has gone way beyond the scope of the suit by recommending a spinoff of its widely used Chrome, and holding open the option to force a sale of its Android mobile operating system. The legal case focused on Google's agreements with partners such as Apple and Samsung to distribute its search tools, noted Google president of global affairs Kent Walker. "The DOJ chose to push a radical interventionist agenda that would harm Americans and America's global technology leadership," Walker wrote in a blog post. Google is also battling to protect Chrome after a different US judge ruled this month that it wielded monopoly power in the online ad technology market, in a legal blow that could rattle the tech giant's revenue engine. The federal government and more than a dozen US states filed the antitrust suit against Google, accusing it of acting illegally to dominate major sectors of digital advertising. District Court Judge Leonie Brinkema ruled that Google built an illegal monopoly over ad software and tools used by publishers. "Google has willfully engaged in a series of anticompetitive acts to acquire and maintain monopoly power in the publisher ad server and ad exchange markets for open-web display advertising," Brinkema said in her ruling. Online advertising is the driving engine of Google's fortune and pays for widely used online services like Maps, Gmail, and search offered free. Combined, the courtroom defeats have the potential to leave Google split up and its influence curbed.

Alphabet shares jump as Google Search advertising boosts growth

Alphabet shares jumped following strong quarterly earnings, as Google Search advertising delivered better-than-expected growth. Google Cloud, its key growth driver, also saw a sharp rise in profit as demand continued to outpace capacity. Alphabet, the parent company of Google and YouTube, reported first-quarter earnings that exceeded analysts' expectations, primarily driven by robust performance in its core search advertising business. Meanwhile, Google Cloud - the company's key growth metric - recorded a significant increase in profitability. Alphabet's ongoing investment in artificial intelligence (AI) underpinned growth across all segments. Chief Executive Sundar Pichai said: "We're pleased with our strong Q1 results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique full stack approach to AI." Shares in Alphabet rose nearly 5% in after-hours trading, following a 2.5% rally during regular trading on Thursday. Despite the upbeat results, the stock remains down 16% year-to-date, amid broad tech-sector sell-offs triggered by tariff-related concerns on Wall Street. Alphabet's board also approved an additional $70 billion (€61.7 billion) in share buybacks and raised its dividend by 5% to $0.21 (€0.19) per share. Google advertising business posts solid growth Alphabet reported total revenue of $90.2bn (€79.5bn), up 12% on the year, surpassing the $89.12bn (€79.2bn) expected by analysts. Google's search advertising remained the largest revenue contributor, generating $50.7bn (€44.7bn) in the quarter, a 9.8% year-on-year increase. The company recently launched AI Overviews in Google Search, which summarise results at the top of the page. The feature has gained popularity, attracting 1.5 million users per month and becoming a spotlight in the company's competition with Microsoft's ChatGPT and other chatbot technologies. However, the rollout has led to reduced traffic for independent websites. In addition, the company warned that US tariff policy may negatively affect advertising revenue this year. Google's Chief Business Officer Philipp Schindler said President Donald Trump's decision to end the de minimis trade exemption would create a "slight headwind" for advertising income, particularly from Asia-Pacific-based retailers. The de minimis rule - which allows imports valued below $800 (€706)to enter the US duty-free - will end on 2 May. The move targets lower-cost imports, particularly Chinese e-commerce products from platforms such as Temu and Shein. These companies are likely to reduce their advertising spend on Google as a result. Google Cloud sees profit surge Google Cloud revenue rose 28% year-on-year to $12.3bn (€10.8bn), led by strong growth across Google Cloud Platform (GCP), such as core GCP products, AI infrastructure, and generative AI solutions, according to the earnings report. A highlight of the results was the division's profitability. Operating income surged more than 200% from a year ago to $2.18bn (€1.92bn) in the first quarter. While revenue slightly missed forecasts, the sharp rise in profit suggests Alphabet's heavy AI investments are beginning to yield returns. Chief Financial Officer Anat Ashkenazi said that demand continued to exceed data centre capacity for a second consecutive quarter. She noted in February that Alphabet expects to invest $75bn (€66bn) in capital expenditure this year. Google Cloud remains the world's third-largest cloud provider, trailing Amazon's AWS and Microsoft's Azure. YouTube ads and Waymo YouTube advertising revenue reached $8.93bn (€7.87bn), up 10% year-on-year, slightly below analysts' expectations. However, the segment has accelerated in recent quarters, supported by growth in YouTube TV and podcast offerings. Alphabet's self-driving car unit, Waymo, generated $450 million (€397 million) in revenue, down 9% from a year earlier. Waymo, a key rival to Tesla's Robotaxi, remained loss-making during the quarter. CFO Ashkenazi commented: "Waymo is continuing to progress in building on its impressive technological achievements to scale rapidly and develop a sustainable business model."

Alphabet crushes expectations, with cloud, AI and search all showing strength - SiliconANGLE

Alphabet crushes expectations, with cloud, AI and search all showing strength Alphabet Inc., the parent company of Google LLC and YouTube, delivered better-than-expected results as it posted its first-quarter earnings report today, lifting its stock more than 4% after-hours. The internet search and cloud computing giant reported earnings before certain costs such as stock compensation of $2.81 per share, crushing Wall Street's target of just $2.01 per share. Revenue for the period rose 12% compared to a year earlier, hitting $90.32 billion, above the $89.12 billion consensus estimate. All told, Alphabet posted net income of $34.54 billion in the quarter, up 46% from the same period one year earlier. Executives said the higher profit included just over $8 billion in unrealized gains on non-marketable equity securities relating to its investment in a private company. The Google Cloud business once again demonstrated strong growth, with revenue rising 28% from a year earlier to $12.26 billion. It fell just short of Wall Street's estimate of $12.27 billion, but investors seemed willing to overlook that, as the unit's profitability accelerated considerably. Alphabet said Google Cloud's margins came in at an impressive 17.8%, up from just 9.4% a year earlier. Alphabet Chief Executive Sundar Pichai (pictured) said the highlight of the quarter for Google Cloud was the launch of Gemini 2.5, which is the company's most intelligent artificial intelligence model so far. "It's achieving breakthroughs in performance and is an extraordinary foundation for our future innovation," he promised. In March, the company announced it will pay $32 billion to acquire the Israeli cloud security company Wiz Inc., in what will be its biggest-ever acquisition when the deal closes next year. Google Cloud said at the time that the deal will help to boost its security offerings. In a conference call with analysts, Pichai reiterated that point, saying it will help to drive "more multicloud computing, something our customers want." Alphabet Chief Financial Officer Anat Ashkenazi said the vast majority of the company's $17.2 billion in capital expenditures during the quarter were directed towards the cloud computing business. She added that the largest investment was "servers, followed by data centers," aimed at supporting Google Cloud and its AI offerings. In addition, she reiterated that Alphabet is still committed to spending $75 billion over the course of the year, primarily on AI infrastructure. "The investment level may fluctuate from quarter to quarter due to the impact of changes in the timing of deliveries and construction schedules," she said. Elsewhere, Alphabet's search and advertising businesses showed strength despite the rising threat of AI-native competitors and concerns around the economic turmoil caused by U.S. President Donald Trump's trade policies. The company's "Search and Other" business unit delivered $50.7 billion in sales, up 10% from a year earlier and above the consensus estimate of $50.2 billion. YouTube advertising revenue came to $8.93 billion, just shy of the Street's target. Overall, advertising revenue hit $66.89 billion, up 9% from a year ago. Alphabet has responded to the AI threat to its search business by integrating its own, Gemini-powered search results in a feature called AI Overviews. On the call, Google Chief Business Officer Philipp Schindler said AI Overviews now counts 1.5 billion users per month, up from just 1 billion in October. "Q1 marked our largest expansion to date for AI overviews, both in terms of launching to new users and providing responses for more questions," said Schindler. "Overall, we continue to see monetization at approximately the same rate, which gives us a strong base in which we can innovate even more." On the other hand, Schindler admitted that Google "is not immune to the macro trade environment" and warned that Trump's decision to close the "de minimis" trade loophole next month will create a "slight headwind" for the advertising business, mainly affecting Asia-based retailers. The de minimis trade exemption is a rule that allows shipments valued at less than $800 to be imported into the U.S. without any duties. Chinese e-commerce giants such as Temu and Shein regularly take advantage of this to ship low-cost consumer products into the country, spending millions of dollars on online ads in the process. But the exemption will close on May 2, reducing their capacity to undercut U.S. firms. Nonetheless, Schindler said the company has "a lot of experience in managing through uncertain times," and specializes in helping companies understand the changing consumer behaviors relevant to their businesses. Investing.com analyst Thomas Monteiro said in a note to clients that "Alphabet has delivered a solid response to those questioning the solidity of the search business." "When you combine the numbers seen today with Alphabet's also solid cloud performance, it leaves few doubts about the company's leading position in the AI search revolution," the analyst wrote. Alphabet's "Other Bets" business unit, which includes the life sciences division Verily and the self-driving car unit Waymo, is still a money pit. Revenue came to $450 million during the quarter, down 9% from a year earlier, resulting in a net loss of $1.23 billion, up from a $1.02 billion loss one year ago. Despite this, Alphabet officials remain bullish on Waymo's longer term prospects. They said the company's fully autonomous taxis are now providing 250,000 rides per week across the San Francisco Bay Area, Los Angeles, Phoenix and Austin, Texas, up from just 200,000 at the end of the last quarter. "Waymo is continuing to progress in building on its impressive technological achievements to scale rapidly and develop a sustainable business model," Ashkenazi said.

Google Cloud revenue up 28.1% year-on-year as Alphabet shrugs off tariff trauma with strong Q1

A robust set of Q1 numbers from Alphabet yesterday, with nary a mention of tariffs or DOGE to blight the good news. Alphabet's first-quarter revenue rose 12% year-on-year to $90.23 billion, while net income was $34.54 billion, up 49%. Google Cloud revenue was up 28.1% one the comparable year ago quarter, hitting $12.26 billion. Meanwhile capital expenditures reached a record $17.2 billion during the quarter, but the company is doggedly maintaining its plan to put $75 billion towards this for the full year, more than double its annual average over the past five years. Infrastructure spending is essential for growth, insisted CEO Sundar Pichai: Our long-term investments in our global network have positioned us well. Google's network is robust and resilient supported by over 2 million miles of fiber and 33 subsea cables. Complementing this, we offer the industry's widest range of TPUs and GPUs and continue to invest in next-generation capabilities.A differentiated full stack approach to AI continues to be central to growth, he added: This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and it's widely recognized as the best model in the industry. That's an extraordinary foundation for our future innovation, and we are focused on bringing this to people and customers everywhere. Of course as it's Google, search is never far from the conversation. Pichai said: AI is one of the most revolutionary technologies for enabling and expanding our information mission. For search, we see it growing the number and types of questions we can answer. We are already seeing this with AI Overviews, which now has more than 1.5 billion users every month. Nearly a year after we launched AI Overviews in the US, we continue to see that usage growth is increasing as people learn that search is more useful for more of their queries. So we are leaning in heavily here, continuing to roll the feature out to new countries to more users and to more queries. Building on the positive feedback for AI Overviews, in March we released AI Mode, an experiment in labs. It expands what AI Overviews can do with more advanced reasoning, thinking, and multimodal capabilities to help with questions that need further exploration and comparisons. There are some interesting early learnings, he noted: On average, AI Mode queries are twice as long as traditional Search queries. We're getting really positive feedback from early users about its design, fast response time, and ability to understand complex nuanced questions. We also continue to see significant growth in multi-modal queries. On the topic du jour, agentic AI, Pichai pitched Alphabet in early adopter mode: The early use cases have been transformativ/'e in nature. I think this still feels like early days and long ways to go. Obviously, I had mentioned a few months ago in terms of how we are using AI for coding. We are continuing to make a lot of progress there in terms of people using coding suggestions. I think the last time I had said the number was like 25% of code that's checked in involves people accepting AI suggested solutions. That number is well over 30% now. But more importantly, we have deployed more deeper flows and particularly with the newer models. We are working on early agentic workflows and how we can get those coding experiences to be much deeper. We are deploying it across all parts of the company. Our customer service teams are deeply leading the way there. We've both dramatically enhanced our user experience as well as made it much more efficient to do so. And we are actually bringing all our learnings and expertise in our solutions through cloud to our other customers. But beyond that, all the way from the finance team preparing for this earnings call to everything, it's deeply embedded in everything we do. But I still see it as early days, and there's going be a lot more to do. Nothing to worry about here. Onwards - to Amazon and Microsoft for the by now traditional cloud platform growth comparison.

Google's profits skyrocketed 50% in Q1, beating expectations

Google's profits soared 50% in this year's opening quarter, overcoming the competitive and legal threats that its internet empire is facing amid an economy roiled by a global trade war. The numbers released Thursday by Google parent Alphabet Inc. indicated the company is rising to the challenge so far, but investors are likely to remain concerned about the turbulent times ahead. The Mountain View, California, company earned $34.5 billion, or $2.81 per share, during the January-March period, up from $23.7 billion, or $1.89 per share, at the same time last year. Revenue rose 12% from last year to $90.2 billion. The results easily exceeded analysts' projections, according to FactSet Research. "We continued to see healthy growth and momentum across the business," Alphabet CEO Sundar Pichai told analysts Thursday during a conference call. Alphabet's stock gained more than 4% in extended trading after the numbers came out. The shares had fallen by 16% since the end of last year. Google's first-quarter performance illustrated the continuing power of its long-dominant search engine in a sea of uncertainty. While grappling with competitive threats emerging as artificial intelligence reshapes technology, Google is also battling court decisions condemning its search engine and digital ad network as illegal monopolies. The AI-driven upheaval has opened new opportunities for people to find helpful advice, insights and information through more conversational search options from the likes of OpenAI and Perplexity. Google's long-dominant search engine is countering the new competition with a feature called AI Overviews that appear above web links in its results. It is also testing a conversational tool called AI Mode that would usher in an even more radical change to its business model. "The company delivered a sound response to those questioning the solidity of the search business amid ever-increasing AI demand," Investing.com analyst Thomas Monteiro said. But Google is trying to keep its business intact as by the U.S. Justice Department attempts to break up the company and impose other restraints after a federal judge last year branded its search engine an illegal monopoly. To make matters worse, its digital ad network also was found to be illegally abusing its power earlier this month in another case brought by the Justice Department. President Donald Trump's trade war has injected more uncertainty into the mix by rattling the financial markets amid fears the tariffs will reignite inflation while dragging the economy into a recession. Although Google's digital services aren't directly impacted by the tariffs, a recession would likely curtail the spending on ads that generate most of Alphabet's revenue. But there were few signs of a slowdown in the past quarter. Google's ad revenue during the period totaled $66.9 billion, an 8% increase from the same time a year ago. Although Google's executives are mostly upbeat during Thursday's call, they also acknowledged conditions should the trade war trigger a recession. "We are obviously not immune to the macro environment," said Philipp Schindler, Alphabet's chief business officer. The past quarter's steady growth emboldened Alphabet to stand firm on plans to invest $75 billion on AI and other technologies this year while also pursuing approval of a $32 billion deal to buy cybersecurity firm Wiz. -- This story has been corrected to reflect Alphabet's first-quarter profit increased 50% from the same time last year, or $2.81 per share, and that its revenue for the January-March period totaled $90.2 billion. The story also has been corrected to reflect Google's ad revenue for the first quarter totaled $66.9 billion, an 8% increase from a year ago. An earlier version reported the incorrect dollar amounts and percentage change.

Google's parent begins year with robust growth despite legal, competitive and economic threats

Google's profits soared 28% in this year's opening quarter, overcoming the competitive and legal threats that its internet empire is facing amid an economy roiled by a global trade war. The numbers released Thursday by Google parent Alphabet Inc. indicated the company is rising to the challenge so far, but investors are likely to remain concerned about the turbulent times ahead. The Mountain View, California, company earned $26.5 billion, or $2.15 per share, during the January-March period, up from $20.7 billion, or $1.64 per share, at the same time last year. Revenue rose 12% from last year to $96.5 billion. The results easily exceeded analysts' projections, according to FactSet Research. Alphabet's stock gained more than 3% in extended trading after the numbers came out. The shares had fallen by 16% since the end of last year. Google's first-quarter performance illustrated the continuing power of its long-dominant search engine in a sea of uncertainty. While grappling with competitive threats emerging as artificial intelligence reshapes technology, Google is also battling court decisions condemning its search engine and digital ad network as illegal monopolies. The AI-driven upheaval has opened new opportunities for people to find helpful advice, insights and information through more conversational search options from the likes of OpenAI and Perplexity. Google's long-dominant search engine is countering the new competition with a feature called AI Overviews that appear above web links in its results. It is also testing a conversational tool called AI Mode that would usher in an even more radical change to its business model. Meanwhile, Google is trying to fend off an attempt by the U.S. Justice Department to break up the company and impose other restraints after a federal judge last year branded its search engine an illegal monopoly. To make matters worse, its digital ad network also was found to be illegally abusing its power earlier this month in another case brought by the Justice Department. President Donald Trump's trade war has injected more uncertainty into the mix by rattling the financial markets amid fears the tariffs will reignite inflation while dragging the economy into a recession. Although Google's digital services aren't directly impacted by the tariffs, a recession would likely curtail the spending on ads that generate most of Alphabet's revenue. But there were few signs of a slowdown in the past quarter, emboldening the company to stand firm on plans to invest $75 billion on AI and other technologies this year while also pursuing approval of a $32 billion deal to buy cybersecurity firm Wiz. "We are confident about the opportunities ahead," Alphabet CEO Sundar Pichai said in a statement.

Google's parent begins year with robust growth despite legal, competitive and economic threats

Google's profits soared 28% in this year's opening quarter, overcoming the competitive and legal threats that its internet empire is facing amid an economy roiled by a global trade war Google's profits soared 28% in this year's opening quarter, overcoming the competitive and legal threats that its internet empire is facing amid an economy roiled by a global trade war. The numbers released Thursday by Google parent Alphabet Inc. indicated the company is rising to the challenge so far, but investors are likely to remain concerned about the turbulent times ahead. The Mountain View, California, company earned $26.5 billion, or $2.15 per share, during the January-March period, up from $20.7 billion, or $1.64 per share, at the same time last year. Revenue rose 12% from last year to $96.5 billion. The results easily exceeded analysts' projections, according to FactSet Research. "We continued to see healthy growth and momentum across the business," Alphabet CEO Sundar Pichai told analysts Thursday during a conference call. Alphabet's stock gained 4% in extended trading after the numbers came out. The shares had fallen by 16% since the end of last year. Google's first-quarter performance illustrated the continuing power of its long-dominant search engine in a sea of uncertainty. While grappling with competitive threats emerging as artificial intelligence reshapes technology, Google is also battling court decisions condemning its search engine and digital ad network as illegal monopolies. The AI-driven upheaval has opened new opportunities for people to find helpful advice, insights and information through more conversational search options from the likes of OpenAI and Perplexity. Google's long-dominant search engine is countering the new competition with a feature called AI Overviews that appear above web links in its results. It is also testing a conversational tool called AI Mode that would usher in an even more radical change to its business model. "The company delivered a sound response to those questioning the solidity of the search business amid ever-increasing AI demand," Investing.com analyst Thomas Monteiro said. But Google is trying to keep its business intact as by the U.S. Justice Department attempts to break up the company and impose other restraints after a federal judge last year branded its search engine an illegal monopoly. To make matters worse, its digital ad network also was found to be illegally abusing its power earlier this month in another case brought by the Justice Department. President Donald Trump's trade war has injected more uncertainty into the mix by rattling the financial markets amid fears the tariffs will reignite inflation while dragging the economy into a recession. Although Google's digital services aren't directly impacted by the tariffs, a recession would likely curtail the spending on ads that generate most of Alphabet's revenue. But there were few signs of a slowdown in the past quarter. Google's ad revenue during the period totaled $72.5 billion, an 11% increase from the same time a year ago. The steady growth emboldened Alphabet to stand firm on plans to invest $75 billion on AI and other technologies this year while also pursuing approval of a $32 billion deal to buy cybersecurity firm Wiz.

Google's Parent Begins Year With Robust Growth Despite Legal, Competitive and Economic Threats

Google's profits soared 28% in this year's opening quarter, overcoming the competitive and legal threats that its internet empire is facing amid an economy roiled by a global trade war. The numbers released Thursday by Google parent Alphabet Inc. indicated the company is rising to the challenge so far, but investors are likely to remain concerned about the turbulent times ahead. The Mountain View, California, company earned $26.5 billion, or $2.15 per share, during the January-March period, up from $20.7 billion, or $1.64 per share, at the same time last year. Revenue rose 12% from last year to $96.5 billion. The results easily exceeded analysts' projections, according to FactSet Research. Alphabet's stock gained more than 3% in extended trading after the numbers came out. The shares had fallen by 16% since the end of last year. Google's first-quarter performance illustrated the continuing power of its long-dominant search engine in a sea of uncertainty. While grappling with competitive threats emerging as artificial intelligence reshapes technology, Google is also battling court decisions condemning its search engine and digital ad network as illegal monopolies. The AI-driven upheaval has opened new opportunities for people to find helpful advice, insights and information through more conversational search options from the likes of OpenAI and Perplexity. Google's long-dominant search engine is countering the new competition with a feature called AI Overviews that appear above web links in its results. It is also testing a conversational tool called AI Mode that would usher in an even more radical change to its business model. Meanwhile, Google is trying to fend off an attempt by the U.S. Justice Department to break up the company and impose other restraints after a federal judge last year branded its search engine an illegal monopoly. To make matters worse, its digital ad network also was found to be illegally abusing its power earlier this month in another case brought by the Justice Department. President Donald Trump's trade war has injected more uncertainty into the mix by rattling the financial markets amid fears the tariffs will reignite inflation while dragging the economy into a recession. Although Google's digital services aren't directly impacted by the tariffs, a recession would likely curtail the spending on ads that generate most of Alphabet's revenue. But there were few signs of a slowdown in the past quarter, emboldening the company to stand firm on plans to invest $75 billion on AI and other technologies this year while also pursuing approval of a $32 billion deal to buy cybersecurity firm Wiz. "We are confident about the opportunities ahead," Alphabet CEO Sundar Pichai said in a statement. Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Google Parent Alphabet's Stock Climbs as AI-Fueled Search Growth Drives Revenue Beat

Google parent Alphabet (GOOGL) reported first-quarter revenue and profit that exceeded analysts' expectations, sending shares higher in extended trading Thursday. The tech titan reported revenue of $90.23 billion, up 12% year-over-year and above the analyst consensus from Visible Alpha. Net income of $34.54 billion, or $2.81 per share, compared to $23.66 billion, or $1.89 per share, a year earlier, also topping Wall Street's estimates. Google Cloud revenue rose 28% to $12.3 billion, while Search & Other segment revenue grew 10% to $50.7 billion. CEO Sundar Pichai said Search growth was driven by "engagement we're seeing with features like AI Overviews, which now has 1.5 billion users per month." The company also raised its quarterly dividend by 5% to 21 cents, and announced an additional $70 billion in stock buybacks. Alphabet's Class A shares rose over 4% in after-hours trading. The stock was down about 16% for 2025 through Thursday's close.

Google Says Deep AI Investments Powering Ad Sales

The integration of AI into Google search is key to its advertising appea Google parent Alphabet reassured jittery tech investors that its AI investments were powering returns at its crucial ad business on Thursday, downplaying any impact from global economic uncertainty, for now. The search giant's first-quarter profit and revenue beat expectations, and the company said it would buy back $70 billion (roughly Rs. 5,97,800 crore) in stock, pushing its shares up four percent after market and adding $75 billion (roughly Rs. 6,40,362 crore) to its market value. Alphabet reaffirmed its ambitious AI build-out plans and backed its $75 billion (roughly Rs. 6,40,362 crore) capex guidance for the year, offering hopes for investors in Meta and Amazon, whose shares also rose in aftermarket trading. US President Donald Trump's trade policy has triggered worries of an economic downturn, prompting companies to rethink their spending on advertising. It has also fuelled investor concern that tech giants may have to pause or slow their ambitious AI infrastructure build-outs due to rising costs from tit-for-tat tariffs between the US and China. Big Tech has continued to defend its aggressive AI investments, saying these were necessary to remain competitive. But analysts have said there are early signs of tech majors pulling back on new data center commitments. "I saw the narrative around infrastructure spending as being one that was particularly a negative narrative in the market, suggesting that AI investments had peaked and that this was a sign that the bubble was deflating. And I think what Google told us today was it's absolutely not the case," said Will Rhind, CEO of global ETF issuer GraniteShares. Revenue from Google's mainstay ad business, which makes up nearly three-quarters of its overall revenue, rose 8.5 percent to $66.89 billion (roughly Rs. 5,71,134 crore) in the quarter -- a slowdown from the prior quarter's 10.6 percent increase, but still above analysts' expectations for a rise of 7.7 percent. Still, Google's chief business officer Philipp Schindler told analysts during a conference call the company was not immune to macroeconomic uncertainty. "The changes to de minimis exemption will obviously cause a slight headwind to our ads business in 2025, primarily from APAC (Asia Pacific)-based retailers," he said, referring to Trump's order this month to end a trade rule allowing low-value packages from China and Hong Kong to enter the US free of duties. Some of the biggest US advertisers include Chinese e-commerce websites Temu and Shein, and they are sharply cutting their US digital ad spending, industry data showed, in a move that could dent ad revenues at Google and Facebook parent Meta. Search Revenue Growth The integration of AI into Google search is key to its advertising appeal, as it offers advertisers the ability to run more effective campaigns and get more return on their dollars. CEO Sundar Pichai said AI Overviews, the summaries that appear above traditional hyperlinks to relevant webpages, now have 1.5 billion users per month. In March, Google added a new AI-only mode to its search. "Search revenue growth continues to be strong despite worries about generative AI platforms, such as ChatGPT, impacting the search business," said David Heger, an analyst at Edward Jones. Google Cloud reported a 28 percent rise in revenue to $12.26 billion (roughly Rs. 1,04,680 crore), slowing from the 30.1 percent growth reported in the previous quarter. Analysts were expecting the unit to report revenue of $12.27 billion (roughly Rs. 1,04,745 crore), according to LSEG's data compilation. The company reported total revenue of $90.23 billion (roughly Rs. 7,70,265 crore) for the first quarter, compared to analysts' average estimate of $89.12 billion (roughly Rs. 7,60,782 crore) Alphabet reported a profit of $2.81 (roughly Rs. 2.81) per share for the January-March period, beating estimates of $2.01 (roughly Rs. 171.59) per share, according to LSEG data. The firm also said it would raise its quarterly dividend by five percent to 21 cents per share. The company spent $17.20 billion (roughly Rs. 1,46,824 crore) on capital expenditures in the quarter, a 43 percent increase from the same period a year earlier. © Thomson Reuters 2025

Google says deep AI investments powering ad sales, soothing anxious investors

Alphabet beat Q1 profit and revenue estimates, boosted by strong ad and AI-driven search performance. It announced a $70 billion stock buyback, lifting shares 4%. Despite global economic concerns and US-China trade tensions, Alphabet reaffirmed its $75 billion AI investment plan, signaling confidence in continued growth and infrastructure expansion.Google parent Alphabet reassured jittery tech investors that its AI investments were powering returns at its crucial ad business on Thursday, downplaying any impact from global economic uncertainty, for now. The search giant's first-quarter profit and revenue beat expectations, and the company said it would buy back $70 billion in stock, pushing its shares up 4% after market and adding $75 billion to its market value. Alphabet reaffirmed its ambitious AI build-out plans and backed its $75 billion capex guidance for the year, offering hopes for investors in Meta and Amazon, whose shares also rose in aftermarket trading. US President Donald Trump's trade policy has triggered worries of an economic downturn, prompting companies to rethink their spending on advertising. It has also fuelled investor concern that tech giants may have to pause or slow their ambitious AI infrastructure build-outs due to rising costs from tit-for-tat tariffs between the US and China. Big Tech has continued to defend its aggressive AI investments, saying these were necessary to remain competitive. But analysts have said there are early signs of tech majors pulling back on new data center commitments. "I saw the narrative around infrastructure spending as being one that was particularly a negative narrative in the market, suggesting that AI investments had peaked and that this was a sign that the bubble was deflating. And I think what Google told us today was it's absolutely not the case," said Will Rhind, CEO of global ETF issuer GraniteShares. Revenue from Google's mainstay ad business, which makes up nearly three-quarters of its overall revenue, rose 8.5% to $66.89 billion in the quarter - a slowdown from the prior quarter's 10.6% increase, but still above analysts' expectations for a rise of 7.7%. Still, Google's chief business officer Philipp Schindler told analysts during a conference call the company was not immune to macroeconomic uncertainty. "The changes to de minimis exemption will obviously cause a slight headwind to our ads business in 2025, primarily from APAC (Asia Pacific)-based retailers," he said, referring to Trump's order this month to end a trade rule allowing low-value packages from China and Hong Kong to enter the US free of duties. Some of the biggest US advertisers include Chinese e-commerce websites Temu and Shein, and they are sharply cutting their US digital ad spending, industry data showed, in a move that could dent ad revenues at Google and Facebook parent Meta. Search revenue growth The integration of AI into Google search is key to its advertising appeal, as it offers advertisers the ability to run more effective campaigns and get more return on their dollars. CEO Sundar Pichai said AI Overviews, the summaries that appear above traditional hyperlinks to relevant webpages, now have 1.5 billion users per month. In March, Google added a new AI-only mode to its search. "Search revenue growth continues to be strong despite worries about generative AI platforms, such as ChatGPT, impacting the search business," said David Heger, an analyst at Edward Jones. Google Cloud reported a 28% rise in revenue to $12.26 billion, slowing from the 30.1% growth reported in the previous quarter. Analysts were expecting the unit to report revenue of $12.27 billion, according to LSEG's data compilation. The company reported total revenue of $90.23 billion for the first quarter, compared to analysts' average estimate of $89.12 billion. Alphabet reported a profit of $2.81 per share for the January-March period, beating estimates of $2.01 per share, according to LSEG data. The firm also said it would raise its quarterly dividend by 5% to 21 cents per share. The company spent $17.20 billion on capital expenditures in the quarter, a 43% increase from the same period a year earlier.

Alphabet quarterly earnings lifted by cloud and AI

Alphabet, Google's parent company, reported a $34.5 billion profit, driven by strong cloud and AI growth. However, it faces major US antitrust battles that could force it to divest Chrome or Android. Despite strong earnings, legal pressures threaten Google's dominance in search and advertising, with appeals ongoingGoogle parent Alphabet on Thursday reported profit of $34.5 billion in the recently ended quarter, powered by its cloud computing and artificial intelligence operations. Overall revenue at Alphabet grew 12 percent to $90.2 billion compared to the same period a year earlier, while revenue for the cloud unit grew 28 percent to $12.3 billion, according to the tech giant. Alphabet chief executive Sundar Pichai said the strong quarterly results reflect healthy growth and momentum across the business. "Underpinning this growth is our unique full stack approach to AI," Pichai said in an earnings release. He touted the latest Gemini software as Alphabet's most intelligent AI model and an "extraordinary foundation" for the Silicon Valley company's innovation. Alphabet shares were up more than three percent in after-market trades that followed release of the earnings figures. "Cloud grew rapidly with significant demand for our solutions," Pichai said of Alphabet's services and tools hosted at data centers. Investors have been watching closely to see whether the tech giant may be pouring too much money into artificial intelligence. Google and rivals are spending billions of dollars on data centers and more for AI, while the rise of lower-cost model DeepSeek from China raises questions about how much needs to be spent. Antitrust battles Meanwhile the online ad business that churns out the cash Google invests in its future could be neutered due to a defeat in a US antitrust case. US government attorneys are urging a federal judge to make Google spin off its Chrome browser, arguing artificial intelligence is poised to ramp up the company's online search dominance. The Department of Justice (DOJ) is arguing its position before District Judge Amit Mehta, who is considering "remedies" after making a landmark decision last year that Google maintained an illegal monopoly in online search. "Nothing less than the future of the internet is at stake here," Assistant Attorney General Gail Slater said prior to the start of the hearings this week in Washington. "If Google's conduct is not remedied, it will control much of the internet for the next decade and not just in internet search, but in new technologies like artificial intelligence." Google countered in the case that the United States has gone way beyond the scope of the suit by recommending a spinoff of its widely used Chrome, and holding open the option to force a sale of its Android mobile operating system. The legal case focused on Google's agreements with partners such as Apple and Samsung to distribute its search tools, noted Google president of global affairs Kent Walker. "The DOJ chose to push a radical interventionist agenda that would harm Americans and America's global technology leadership," Walker wrote in a blog post. Google is also battling to protect Chrome after a different US judge ruled this month that it wielded monopoly power in the online ad technology market, in a legal blow that could rattle the tech giant's revenue engine. The federal government and more than a dozen US states filed the antitrust suit against Google, accusing it of acting illegally to dominate major sectors of digital advertising. District Court Judge Leonie Brinkema ruled that Google built an illegal monopoly over ad software and tools used by publishers. "Google has willfully engaged in a series of anticompetitive acts to acquire and maintain monopoly power in the publisher ad server and ad exchange markets for open-web display advertising," Brinkema said in her ruling. Online advertising is the driving engine of Google's fortune and pays for widely used online services like Maps, Gmail, and search offered free. Combined, the courtroom defeats have the potential to leave Google split up and its influence curbed. Google said it is appealing both rulings.

Alphabet Q1 results: Profit surges on AI, Cloud business, despite legal challenges

Revenue for the quarter came in at $90.23 billion, up 12% from a year ago, slightly surpassing analysts' expectations of $89.15 billion. Operational income grew 20%, also exceeding forecasts. Sundar Pichai, Alphabet's CEO, said, "We're pleased with our strong results this quarter. We continued to see healthy growth and momentum across the business, including AI powering new features."Alphabet, Google's parent company, reported a significant increase in profit on Thursday. The company's net income for the first quarter stood at $34.54 billion, up from $23.66 billion last year. Much of the profit boost, however, came from equity investments rather than core business activities. Revenue for the quarter came in at $90.23 billion, up 12% from a year ago, slightly surpassing analysts' expectations of $89.15 billion. Operational income grew 20%, also exceeding forecasts. Commenting on the performance, Sundar Pichai, Alphabet's CEO, said, "We're pleased with our strong results this quarter. We continued to see healthy growth and momentum across the business, including AI powering new features." Q1 updates Gemini: "Our differentiated, full stack approach to AI continues to be central to our growth," said Pichai, in a post on X, He revealed that the number of active users of AI Studio and the Gemini API had increased by over 200% since the start of the year, thanks to the launch of Gemini 2.5 Pro. Pichai added that Gemini has now been integrated into all 15 of Google's major products, each with over 500 million users. AI overviews in Search have also reached 1.5 billion monthly users, he noted. Additionally, the Alphabet CEO announced that Gemini Live camera and screen sharing features are being rolled out to all Android devices, including the Pixel and Samsung S25. Enterprise AI: "Our AI leadership was on display at @GoogleCloud Next, where we launched Ironwood, our most powerful TPU yet -- 10X compute boost, optimised for inference at scale. And we're first to bring Nvidia's next-gen Blackwell GPUs to customers," said Pichai. YouTube: He noted that YouTube, which celebrated its 20th anniversary this week, has been the number one streaming platform on US TVs for two years.It now has over 125 million Music & Premium subscribers, along with more than 1 billion monthly podcast users. Pichai added that YouTube, along with Google One, is a key driver of paid subscriptions, which have now surpassed 270 million. Waymo: Autonomous driving cab service Waymo has now expanded significantly, providing over 250,000 paid rides each week, which is five times the number from a year ago, Pichai said. While Alphabet's results were strong, the company faced challenges in early 2025, with shares down nearly 25% from their February peak. One reason for this drop was the economic disruption caused by President Donald Trump's trade tariffs. Google is also grappling with the rapid evolution of AI in search, which has brought in new competitors such as OpenAI and Perplexity. Additionally, Google is also facing several antitrust legal battles. In August, a US federal judge ruled that the company has an illegal monopoly in online search and ordered it to sell Chrome. Legal proceedings around this decision are ongoing. Earlier this month, another federal judge ruled that Google has a monopoly in online advertising technology. Google remains determined to fight these cases, but an unfavourable outcome could potentially result in the company being broken up, significantly limiting its influence.

Alphabet rises as AI bets begin to pay off

Google's ad business, which accounts for nearly 75% of the company's total revenue, posted an 8.5% rise in first-quarter revenue to $66.89 billion, though slow compared with last quarter's 10.6% surge, the numbers comfortably beat analysts' expectations of 7.7% growth, according to data compiled by LSEG.Alphabet's shares advanced over 5% in premarket trading on Friday after the Google parent assured investors that its bold AI investments are fueling a revenue boom in its advertising empire and cushioning a slowdown in cloud growth. "Alphabet is delivering well on the AI front, proving many sceptics wrong," said Gerrit Smit, manager of Stonehage Fleming Global Best Ideas Equity Fund. Google's ad business, which accounts for nearly 75% of the company's total revenue, posted an 8.5% rise in first-quarter revenue to $66.89 billion, though slow compared with last quarter's 10.6% surge, the numbers comfortably beat analysts' expectations of 7.7% growth, according to data compiled by LSEG. Earlier this month, Alphabet reiterated its plans to invest around $75 billion this year in expanding its data center capacity, and peer Microsoft is also on track to exceed $80 billion in infrastructure upgrades. The total represents nearly half of the analysts' estimated $320 billion that Big Tech is expected to invest in AI in 2025. Rising U.S.-China trade tensions and economic slowdown fears have prompted companies to rethink their ad budgets, fuelling investor concerns that this may force tech giants to scale back AI infrastructure investments despite their push to stay competitive. "The Mag7 might not be the rockstars they were last year," but Alphabet's strong earnings can still bolster investor confidence and lift risk appetite, said Chris Beauchamp, chief market analyst at online trading platform IG. Google Cloud's revenue jumped 28% to $12.26 billion, slightly below analysts' expectations of $12.27 billion, marking a slowdown from the previous quarter's 30.1% growth. Alphabet's earnings also serve as a reality check on how Big Tech is tackling tariff uncertainties, rising costs and stiff competition in AI and regulatory challenges, shaping the future of tech investments and the trajectory of AI's billion-dollar promises. While macroeconomic uncertainties persist, "GOOGL's leading reach and user base combined with the ability to continue shipping GenAI-enabled products... will keep it a relative out-performer," Morgan Stanley said in a note. At least seven brokerages raised their price target for the stock, following the results. Despite a strong financial performance, Alphabet faces major legal hurdles as the U.S. Department of Justice pursues antitrust actions that could force Google to shed key assets, including Chrome. Officials argue that the measures are important to prevent Google from using its artificial intelligence products to extend its dominance in online search. Alphabet's stock lost about 16% this year, while Microsoft and Meta have lost ~8% and ~9%, respectively. Alphabet's 12-month forward price-to-earnings ratio stands at 17.33, trailing Microsoft's 26.56 and Meta's 20.49.

Alphabet shares rises as AI bets begin to pay off

Alphabet shares rose over 5% after strong ad revenue and AI-driven growth beat expectations, despite cloud slowdown and macroeconomic concerns. Investors remain confident amid heavy AI investments and legal pressures, with analysts raising price targets and Google seen as an outperformer in Big Tech's evolving landscape.Alphabet's shares advanced over 5% in premarket trading on Friday after the Google parent assured investors that its bold AI investments are fueling a revenue boom in its advertising empire and cushioning a slowdown in cloud growth. "Alphabet is delivering well on the AI front, proving many sceptics wrong," said Gerrit Smit, manager of Stonehage Fleming Global Best Ideas Equity Fund. Google's ad business, which accounts for nearly 75% of the company's total revenue, posted an 8.5% rise in first-quarter revenue to $66.89 billion, though slow compared with last quarter's 10.6% surge, the numbers comfortably beat analysts' expectations of 7.7% growth, according to data compiled by LSEG. Earlier this month, Alphabet reiterated its plans to invest around $75 billion this year in expanding its data center capacity, and peer Microsoft is also on track to exceed $80 billion in infrastructure upgrades. The total represents nearly half of the analysts' estimated $320 billion that Big Tech is expected to invest in AI in 2025. Rising US-China trade tensions and economic slowdown fears have prompted companies to rethink their ad budgets, fuelling investor concerns that this may force tech giants to scale back AI infrastructure investments despite their push to stay competitive. "The Mag7 might not be the rockstars they were last year," but Alphabet's strong earnings can still bolster investor confidence and lift risk appetite, said Chris Beauchamp, chief market analyst at online trading platform IG. Google Cloud's revenue jumped 28% to $12.26 billion, slightly below analysts' expectations of $12.27 billion, marking a slowdown from the previous quarter's 30.1% growth. Alphabet's earnings also serve as a reality check on how Big Tech is tackling tariff uncertainties, rising costs and stiff competition in AI and regulatory challenges, shaping the future of tech investments and the trajectory of AI's billion-dollar promises. While macroeconomic uncertainties persist, "Google's leading reach and user base combined with the ability to continue shipping GenAI-enabled products... will keep it a relative out-performer," Morgan Stanley said in a note. At least seven brokerages raised their price target for the stock, following the results. Despite a strong financial performance, Alphabet faces major legal hurdles as the U.S. Department of Justice pursues antitrust actions that could force Google to shed key assets, including Chrome. Officials argue that the measures are important to prevent Google from using its artificial intelligence products to extend its dominance in online search. Alphabet's stock lost about 16% this year, while Microsoft and Meta have lost ~8% and ~9%, respectively. Alphabet's 12-month forward price-to-earnings ratio stands at 17.33, trailing Microsoft's 26.56 and Meta's 20.49.

Google Q1 2025 Earnings: CEO Pichai Sees AI Use Grow Despite Uncertain Economy

"This still feels like early days and a long ways to go," Google CEO Sundar Pichai said of the company's AI journey and that of its customers. Interest in Google's artificial intelligence products grew during its most recent quarter despite economic uncertainty-perhaps a sign to solution providers that the AI era can weather any business effects from global tariffs. The company's CFO also said the Mountain View, Calif.-based AI and cloud vendor will keep up its expected $75 billion capital expenditures this year-up from $50 billion the year prior-as it continues to see greater customer demand for cloud and AI offers compared to available capacity. The news comes from the Thursday quarterly earnings call of Google Cloud's parent company, Alphabet, for its first quarter ended March 31. Alphabet and Google CEO Sundar Pichai (pictured) said on the call that within the company, the number of employees accepting AI-suggested code has exceeded 30 percent, growing from the 25 percent measure Pichai revealed in October. "The early use cases have been transformative in nature," Pichai said. "This still feels like early days and a long ways to go." [RELATED: IBM Q1 2025 Earnings: CEO Krishna Maintains Financial Forecast Despite DOGE Cuts, Economic Uncertainty] Pichai was scant on details around Google's upcoming $32 billion acquisition of cybersecurity vendor Wiz, but he did say he believes Wiz will "make it easier and faster for organizations of all types and sizes to protect themselves end-to-end and across all major clouds." "We think this will help spur more multi-cloud computing, something customers want," he said. During the call, Philipp Schindler, senior vice president and chief business officer for Google, said the insurance, retail, health care and travel sectors showed strength in advertising spending-perhaps a sign for solution providers of the sectors resisting any effects on business from a changing economy under global tariffs. On CapEx, the vendor spent $17.2 billion in the first quarter, "primarily reflecting investment in our technical infrastructure, with the largest component being investment in servers, followed by data centers," Anat Ashkenazi, Google CFO and senior vice president, said on the call. Ashkenazi described the cloud demand supply environment as "tight" with revenues "correlated with the timing of deployment of new capacity." "We could see variability in cloud revenue growth rates depending on capacity deployment each quarter," she said. "We expect relatively higher capacity deployment towards the end of 2025." The vendor is working to offset depreciation headwinds to its income statement after increased CapEx spending over the years in part to meet growing demand for cloud and AI products. The vendor saw 31 percent growth year over year in depreciation. Ashkenazi expects the rate to increase throughout the year. "We want to make sure we ramp up to support customer needs and customer demands," she said. To control costs, Alphabet has moderated the pace of compensation growth, consolidated teams, and reevaluated its real estate footprint and the build-out and use of technical infrastructure across the business, Ashkenazi said. "We're looking at-how do we make sure every dollar is used efficiently," she said. "We have a highly rigorous process to determine the demand behind it, and then the allocation of the compute associated with our technical infrastructure investments, ensuring that we're utilizing that appropriately and that we're highly efficient with everything we're doing." Pichai shared a variety of measures to illustrate the growing use of Google's various AI products-including some parts of the Google portfolio with solution provider attachment. The Google Workspace productivity applications suite delivers more than 2 billion AI assists a month, he said. These assists include summarizing email and refining documents. A multimodal AI-powered search capability called "circle to search" on Pixel and Samsung Galaxy devices is now available on more than 250 million devices with usage increasing nearly 40 percent in the quarter. Monthly visual searches with Google Lens increased by 5 billion since October. Other stats Pichai cited include: Pixel, Samsung S25 and all other Android devices are upgrading to the Gemini Live camera and screen sharing. Google Assistant in Google hardware is upgrading to Gemini. The vendor plans to upgrade tablets, cars, and phone-connected devices including headphones and watches "later this year," Pichai said. Pichai told analysts on the call that the vendor is "seeing tremendous reception from developers, enterprises and consumers" to its Gemini 2.5 Pro and Flash models. "We have the best model out there now," Pichai said. "That's going to drive increased adoption as well." Google is also "the leading cloud solution for companies looking to the new era of AI agents-a big opportunity," Pichai said. He said it is still "very early days" for reception to the AI Mode search mode that expands AI Overviews with improved reasoning, thinking and multimodal capabilities. "People are typing in roughly 2x longer queries compared to traditional search," he said. "There's a lot more complex, nuanced questions. ... The fast response time and the fact that they can, kind of, be much more open ended. It can undertake more complicated tasks-product comparisons, for example, has been a positive one. Exploring how to plan a trip. Those are the kinds of early feedback we are seeing." Answering what Pichai said was the first analyst question about Waymo on an earnings call, the CEO said that Google's self-driving car subsidiary has "a variety of optionality in business models across geographies" as use grows and requires "a successful ecosystem of partners." Pichai called out Uber as an early partner for expanding paid service in Silicon Valley and Moove.io as a fleet management partner in Phoenix. But the company is exploring more original equipment manufacturer (OEM) partnerships. "We are widely exploring and, but at the same time, clearly staying focused and making progress-both in terms of safety, the driver experience-and progress on the business model and operationally scaling," Pichai said. "We've been ... laser-focused, and will continue to be, on building the world's best driver." Although Waymo's channel potential is likely in its early days, Pichai said that Waymo serves over 250,000 paid passenger trips each week, up fivefold year over year. Waymo will launch in Atlanta later this summer, with Washington, D.C., and Miami going live in 2026. The technology continues to progress on airport access and freeway driving, Pichai said. Google Cloud brought in $12.3 billion in revenue for the quarter, up 28 percent year over year. The core and AI Google Cloud Platform (GCP) products' growth rate "was much higher than Cloud's overall revenue growth," Ashkenazi said. Cloud saw an operating income of $2.18 billion. Workspace saw an increase in average revenue per seat, the CFO said, without sharing numbers. Alphabet's revenue for the quarter was $90.2 billion, up 14 percent from one year before, ignoring foreign exchange. Alphabet's stock traded at about $169 a share after hours Thursday evening, up about 4.5 percent.

Alphabet Analysts Say AI Opportunity Not Reflected In Stock Price, Welcome Break Up Attempts: 'GOOGL Is Worth More In Pieces' - Alphabet (NASDAQ:GOOGL)

Alphabet Inc. GOOG GOOGL analysts break down the growth from YouTube and Cloud and identify opportunities and risks for the company after first-quarter financial results. The Alphabet Analysts: Rosenblatt analyst Barton Crockett maintained a Neutral rating on Alphabet and lowered the price target from $205 to $189. Bank of America analyst Justin Post reiterated a Buy rating and raised the price target from $185 to $200. WestPark Capital analyst Curtis Shauger reiterated a Buy rating with a $210 price target. Needham analyst Laura Martin maintained a Buy rating with a $178 price target. Goldman Sachs analyst Eric Sheridan maintained a Buy rating and raised the price target from $205 to $220. JPMorgan analyst Doug Anmuth maintained an Overweight rating and raised the price target from $180 to $195. Read Also: If You Invested $1,000 in Google Stock When It Acquired YouTube, Here's How Much You'd Have Today Rosenblatt on Alphabet: The tech company reported a "solid quarter," but future questions remain, Crockett said in a new investor note. "The concern is the potential reality of macro risks near-term ramping up and slowing the ad trajectory, and antitrust and competitive risks longer term from a pair of recent major losses," Crockett said. The analyst noted that Alphabet said little about guidance going forward. One comment from management was that the company is "not immune to macro." Bank of America on Alphabet: Margin expansion was among the bright spots from the quarterly results, Post said in a new investor note. The analyst said Alphabet showed strong execution in search and had upside potential from both search and subscriptions. Growth in AI was also shown in the report, which could be a storyline investors are missing, according to Post. "We think stock valuation at 10x core business EPS does not reflect AI opportunity," Post said. The analyst said Google is in a race with OpenAI, Perplexity and others for AI usage. "We continue to believe Google has data and distribution advantages and has closed the LLM performance gap." He said investors could be underappreciating Alphabet's AI monetization ramp. WestPark on Alphabet: The tech giant showed strong growth in Search and Cloud segments in the first quarter, Shauger said in a new investor note. "GOOG saw broad-based strength across most of its segments and verticals," Shauger said. The analyst said the company's operating margins were impressive in the quarter. Needham on Alphabet: Strength in the ads segment for Alphabet showed minimal tariff impact, Martin said in a new investor note. Martin said there is some concern that the company will not cut costs if revenue slows and will react late if tariffs impact the company. There was no mention of the words "tariffs" or "macro" during prepared remarks, the analyst added. The analyst once again shared some sum-of-the-parts math to calculate how much YouTube and other segments could be worth if spun out from the tech giant. Martin estimates YouTube is worth $60 per share, or around 38% of the company's total value. The analyst gives a valuation of $720 billion for YouTube, significantly higher than the $1.65 billion Alphabet originally paid to acquire the video platform company. "The operating metrics for YouTube were strong in Q1. Watch time growth remains robust, particularly in key monetization opportunity areas such as shorts and living room," Martin said. Martin said investors would likely pay more for a pure-play asset like YouTube and the company is seeing growth from advertising and subscriptions. "We believe that GOOGL is worth more in pieces than together, so we welcome regulators' attempts to break up GOOGL." Goldman Sachs on Alphabet: First-quarter results showed "resilient search & rising AI narratives," Sheridan said in a new investor note. "Alphabet mgmt. emphasized their intention to drive operating efficiencies balanced with forward growth investments," Sheridan said. The analyst said investments in AI are showing through in multiple segments. He noted that YouTube would continue to see strong monetization opportunities. "In our view, Alphabet mgmt. continued to emphasize a very positive tone with respect to the scale for consumer and enterprise computing adoption of their AI solutions." JPMorgan on Alphabet: Search monetization and AI innovation were highlights in the first-quarter results for Anmuth. "Against a backdrop of competitive and macro concerns, Google delivered solid 1Q results w/upside in advertising revenue and operating income," Anmuth said. The analyst said it was a positive quarter and that Google is seeing strong search monetization in a highly competitive field for AI. GOOGL Price Action: Alphabet stock is up 1.8% to $162.15 on Friday versus a 52-week trading range of $140.53 to $207.05. Alphabet stock is down 14.4% year-to-date in 2025. Read Next: Can Google Adapt Like Amazon Or Will It Face eBay's Fate? Gene Munster Says ChatGPT 'Overhang' Isn't Going Away, Shares Candid Take On The Path Forward Photo: Shutterstock GOOGLAlphabet Inc$161.731.54%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum53.18Growth64.44Quality-Value51.39Price TrendShortMediumLongOverviewGOOGAlphabet Inc$163.711.39%Got Questions? AskWhich investors see value in GOOGL breakup?How will YouTube's growth impact investor interest?What AI competitors pose risks to Alphabet?Which investments could benefit from Alphabet's AI focus?How might operating efficiencies affect GOOGL's stock?What market segments could gain from Alphabet's cloud growth?Are ad revenues expected to rise for Alphabet?Which analysts predict upside for GOOGL?How could macroeconomic factors impact Alphabet's valuation?What monetization strategies could enhance YouTube's value?Powered ByMarket News and Data brought to you by Benzinga APIs

Google Parent Alphabet Just Gave Investors 2 Strong Reasons to Stay Bullish | The Motley Fool

What was the most heralded story from Google parent Alphabet's (GOOG 1.52%) (GOOGL 1.70%) first-quarter update Thursday evening? The company's better-than-expected revenue growth. Alphabet reported Q1 revenue of $90.2 billion, higher than the consensus Wall Street estimate of $89.1 billion. However, I don't think this story was the most important one for investors. Sure, Alphabet's share price jumped on Friday following the positive results. But the company has just given investors two strong reasons to remain bullish that are more significant than a quarterly revenue beat, in my opinion. Before the Q1 update, Alphabet stock was down roughly 16% year to date. Most of this decline can be attributed to worries about the negative impacts of the Trump administration's tariffs. It's probably fair to say that the White House's trade policy has been one of the four most disruptive factors for the stock market this century, alongside the dot-com bubble bursting, the 2007-2009 financial crisis, and the COVID-19 pandemic. Google Chief Business Officer Philipp Schindler acknowledged the potential adverse effect on his company's business, noting in the Q1 earnings call that Google is "not immune to the macro environment." If he had stopped there, some might think the stock's recent sell-off was fully warranted. However, Schindler kept talking. He mentioned President Donald Trump's decision to close the de minimis exemption of tariffs on Chinese imports valued at $800 or less. While this loophole closure is causing major worries for many U.S. businesses, Schindler said it would only "cause a slight headwind to our Ads business in 2025, primarily from APAC-based [Asia-Pacific] retailers." Granted, the company could still feel the impact of tariffs, measured in billions of dollars. After all, Google advertising is on track to generate revenue of more than $267 billion in 2025 based on the Q1 results. Still, a "slight headwind" to Google's advertising revenue should make investors breathe a big sigh of relief. After OpenAI launched ChatGPT in late 2022, some proclaimed that generative artificial intelligence (AI) presented a huge threat to Google Search. A few even argued that it could be an existential threat. And there were some legitimate reasons for concern at first. I think it's a much different story now, though. Alphabet and Google CEO Sundar Pichai confirmed this with his prepared remarks in the Q1 earnings call. Pichai said that AI Overviews, Google's integration of generative AI into its search engine, "now has more than 1.5 billion users every month." He added, "Nearly a year after we launched AI Overviews in the U.S., we continue to see that usage growth is increasing as people learn that Search is more useful for more of their queries." Google hasn't stopped with AI Overviews, though. It released AI Mode last month. This new technology offers more advanced reasoning and multimodal capabilities. Pichai noted that users are providing "really positive feedback" about AI Mode's "design, fast response time, and ability to understand complex, nuanced questions." Management's comments about how AI is helping Google Search appear to be backed up by the numbers. Google advertising revenue jumped roughly 8.5% year over year in Q1. Operating income from Google Services, which includes advertising, subscriptions, platforms, and devices, soared 17.1%. But what about the federal court rulings that Google is illegally running a monopoly? Alphabet executives didn't talk about them. That's understandable, though. Management teams rarely make public comments on legal matters. I think the antitrust decisions against Google present legitimate reasons for investors to be concerned. The company's business could be negatively impacted, depending on the final outcome of the lawsuits. Importantly, though, we don't know yet what the final outcome will be. Google could successfully appeal the rulings against it. Even if it loses, the remedies the company could be required to make might be less problematic than anticipated. For now, investors have strong reasons to be bullish about Alphabet stock.

Alphabet Continues to Defy Skeptics as Search Revenue Jumps. Is It Time to Buy the Stock While It's Still On Sale? | The Motley Fool

The reports of Google's death have been greatly exaggerated. If you've recently spent any time on X (formerly Twitter), you've probably read that Google search is a dying business. However, Alphabet's (GOOGL 1.70%) (GOOG 1.52%) first-quarter results once again demonstrate why investors shouldn't begin shoveling dirt on it just yet. Its Google search revenue climbed 10% to a whopping $50.7 billion. It saw strength across verticals, led by the insurance, retail, healthcare, and travel industries. It added that its new multimodality features continue to drive search queries, while its circle-to-search usage increased 40% in the quarter. Circle-to-search allows Android users to search by circling or highlighting text. It can then help users shop for a similar item or even translate text. At the same time, it has 1.5 billion AI Overview users a month. In March, it released AI mode, which will provide its AI Overviews with more advanced reasoning, thinking, and multimodal capabilities. It said its AI Overviews continue to be monetized at a similar rate to search and that it will continue to look to innovate more on this front. While search remains strong, cloud computing continues to be the biggest growth engine for the company. Google Cloud revenue in Q1 jumped 28% year over year to $12.3 billion, while segment operating income soared 142% to $2.2 billion. The company said its Google Cloud Platform (GCP) grew much faster than its overall cloud business. GCP encompasses its AI infrastructure and generative AI solutions, while Google Cloud as a whole also includes Google Workspace, home to Gmail and its worker productivity apps. Alphabet said it will see variability in Google Cloud revenue growth throughout the year based on the timing of new capacity coming online. The business remains capacity-constrained given high demand, and much of its high-capacity deployments are expected to be toward the end of the year. It is investing $75 billion in capital expenditure (capex) to help build out its data center capacity. YouTube, meanwhile, also continues to deliver solid results, with ad revenue rising 10% to $8.9 billion. YouTube, along with Google One (cloud storage), also helped drive a 19% increase in its subscription and device revenue to $10.4 billion. It noted that YouTube has been the No. 1 streaming service in the U.S. by watch time over the past two years. The company also highlighted the strong growth of its Waymo robotaxi business. It is now delivering 250,000 paid trips a week, which is up 5x from a year ago. And if my math is correct, that's 250,000 more paid trips than Tesla currently has. Waymo will launch in Atlanta later this year and then go live in Miami and Washington, D.C., in 2026. Overall, Alphabet grew its total quarterly revenue by 12% (14% on a constant currency basis), to $90.2 billion. Earnings per share, meanwhile, soared 49% year over year to $2.81. That easily topped analyst consensus estimates, which were calling for EPS of $2.01 on revenue of $89.1 billion, as compiled by LSEG. Looking ahead, Alphabet said it would see a "slight headwind" to its ad business from Asian retailers due to the change in the de minimis exemption that will occur in May. Chinese retailers like Temu and Shein have benefited from a rule that allowed shipments worth less than $800 to enter the U.S. duty-free, but that loophole is being closed. These companies have been heavy digital advertisers in the U.S., but have pulled back their spending in response to the U.S.-China tariff war. It added that it was not immune to the macro environment, but that it has a lot of experience in managing through uncertain times. The company also repurchased $15.1 billion in shares in Q1 and announced a new $70 billion buyback. The buyback plan should lend some support to the stock. Alphabet once again showed why it's a stock that investors should not overlook. Its search business remains strong, despite continued investor skepticism, while its cloud business is a growth driver. Meanwhile, the company also gets little credit for its emerging Waymo business, while Tesla's stock seemingly rallies anytime its CEO utters the words robotaxi, cybercab, or autonomous driving. The truth of the matter is that AI is not replacing search. AI has many great uses and is a great complement to search, but it's also a heavy power-consuming process that is significantly more expensive to run than search. As a result, how AI is used and gets monetized will evolve, and search will still be good for the simple queries for which it has traditionally been used. Alphabet's position in AI also should not be underestimated, as its newest Gemini model is a strong offering, and it is leading the way in areas such as text-to-video with Veo 2. Investor skepticism, however, has placed Alphabet's stock in the bargain bin. It trades at a forward price-to-earnings ratio (P/E) of about 18 times 2025 analyst estimates for a collection of attractive market-leading and emerging businesses. This makes it a great buy over the long run.

Alphabet sales beat estimates on Google search advertising

First-quarter sales, excluding partner payouts, were US$76.5 billion, the company said Thursday in a statement. Analysts had expected $75.4 billion on average, according to data compiled by Bloomberg. Net income was $2.81 per share, compared with Wall Street's estimate of $2.01. Shares rose more than 6 per cent in after-market trading. Alphabet needs to ensure momentum in its search advertising and cloud businesses in order to justify its heightened investment in the artificial intelligence race. Competition is prompting the company and its rivals to spend heavily on infrastructure, research and talent. While Google benefits from AI startups spending on its cloud and business tools, it's also racing to present an answer to popular conversational AI chatbots, which consumers are beginning to think of as an alternative to using Google Search. Google's beginning of the answer to that threat -- its "AI Overviews" and "AI Mode" in search, in which summarized responses are drafted by generative AI and highlighted ahead of Google's web links -- have seen mixed success. Meanwhile, Google's AI changes to search have decimated traffic to independent websites across the open web.

Google says deep AI investments powering ad sales, soothing anxious investors

(Reuters) -Google parent Alphabet reassured jittery tech investors that its AI investments were powering returns at its crucial ad business on Thursday, downplaying any impact from global economic uncertainty, for now. The search giant's first-quarter profit and revenue beat expectations, and the company said it would buy back $70 billion in stock, pushing its shares up 4% after market and adding $75 billion to its market value. Alphabet reaffirmed its ambitious AI build-out plans and backed its $75 billion capex guidance for the year, offering hopes for investors in Meta and Amazon, whose shares also rose in aftermarket trading. U.S. President Donald Trump's trade policy has triggered worries of an economic downturn, prompting companies to rethink their spending on advertising. It has also fuelled investor concern that tech giants may have to pause or slow their ambitious AI infrastructure build-outs due to rising costs from tit-for-tat tariffs between the U.S. and China. Big Tech has continued to defend its aggressive AI investments, saying these were necessary to remain competitive. But analysts have said there are early signs of tech majors pulling back on new data center commitments. "I saw the narrative around infrastructure spending as being one that was particularly a negative narrative in the market, suggesting that AI investments had peaked and that this was a sign that the bubble was deflating. And I think what Google told us today was it's absolutely not the case," said Will Rhind, CEO of global ETF issuer GraniteShares. Revenue from Google's mainstay ad business, which makes up nearly three-quarters of its overall revenue, rose 8.5% to $66.89 billion in the quarter -- a slowdown from the prior quarter's 10.6% increase, but still above analysts' expectations for a rise of 7.7%. Still, Google's chief business officer Philipp Schindler told analysts during a conference call the company was not immune to macroeconomic uncertainty. "The changes to de minimis exemption will obviously cause a slight headwind to our ads business in 2025, primarily from APAC (Asia Pacific)-based retailers," he said, referring to Trump's order this month to end a trade rule allowing low-value packages from China and Hong Kong to enter the U.S. free of duties. Some of the biggest U.S. advertisers include Chinese e-commerce websites Temu and Shein, and they are sharply cutting their U.S. digital ad spending, industry data showed, in a move that could dent ad revenues at Google and Facebook parent Meta. SEARCH REVENUE GROWTH The integration of AI into Google search is key to its advertising appeal, as it offers advertisers the ability to run more effective campaigns and get more return on their dollars. CEO Sundar Pichai said AI Overviews, the summaries that appear above traditional hyperlinks to relevant webpages, now have 1.5 billion users per month. In March, Google added a new AI-only mode to its search. "Search revenue growth continues to be strong despite worries about generative AI platforms, such as ChatGPT, impacting the search business," said David Heger, an analyst at Edward Jones. Google Cloud reported a 28% rise in revenue to $12.26 billion, slowing from the 30.1% growth reported in the previous quarter. Analysts were expecting the unit to report revenue of $12.27 billion, according to LSEG's data compilation. The company reported total revenue of $90.23 billion for the first quarter, compared to analysts' average estimate of $89.12 billion. Alphabet reported a profit of $2.81 per share for the January-March period, beating estimates of $2.01 per share, according to LSEG data. The firm also said it would raise its quarterly dividend by 5% to 21 cents per share. The company spent $17.20 billion on capital expenditures in the quarter, a 43% increase from the same period a year earlier. (Reporting by Deborah Sophia in Bengaluru and Kenrick Cai in San Francisco; Editing by Nia Williams and Alan Barona)

Alphabet rises as AI bets begin to pay off

(Reuters) - Alphabet's shares advanced over 5% in premarket trading on Friday after the Google parent assured investors that its bold AI investments are fueling a revenue boom in its advertising empire and cushioning a slowdown in cloud growth. "Alphabet is delivering well on the AI front, proving many sceptics wrong," said Gerrit Smit, manager of Stonehage Fleming Global Best Ideas Equity Fund. Google's ad business, which accounts for nearly 75% of the company's total revenue, posted an 8.5% rise in first-quarter revenue to $66.89 billion, though slow compared with last quarter's 10.6% surge, the numbers comfortably beat analysts' expectations of 7.7% growth, according to data compiled by LSEG. Earlier this month, Alphabet reiterated its plans to invest around $75 billion this year in expanding its data center capacity, and peer Microsoft is also on track to exceed $80 billion in infrastructure upgrades. The total represents nearly half of the analysts' estimated $320 billion that Big Tech is expected to invest in AI in 2025. Rising U.S.-China trade tensions and economic slowdown fears have prompted companies to rethink their ad budgets, fuelling investor concerns that this may force tech giants to scale back AI infrastructure investments despite their push to stay competitive. "The Mag7 might not be the rockstars they were last year," but Alphabet's strong earnings can still bolster investor confidence and lift risk appetite, said Chris Beauchamp, chief market analyst at online trading platform IG. Google Cloud's revenue jumped 28% to $12.26 billion, slightly below analysts' expectations of $12.27 billion, marking a slowdown from the previous quarter's 30.1% growth. Alphabet's earnings also serve as a reality check on how Big Tech is tackling tariff uncertainties, rising costs and stiff competition in AI and regulatory challenges, shaping the future of tech investments and the trajectory of AI's billion-dollar promises. While macroeconomic uncertainties persist, "GOOGL's leading reach and user base combined with the ability to continue shipping GenAI-enabled products... will keep it a relative out-performer," Morgan Stanley said in a note. At least seven brokerages raised their price target for the stock, following the results. Despite a strong financial performance, Alphabet faces major legal hurdles as the U.S. Department of Justice pursues antitrust actions that could force Google to shed key assets, including Chrome. Officials argue that the measures are important to prevent Google from using its artificial intelligence products to extend its dominance in online search. Alphabet's stock lost about 16% this year, while Microsoft and Meta have lost ~8% and ~9%, respectively. Alphabet's 12-month forward price-to-earnings ratio stands at 17.33, trailing Microsoft's 26.56 and Meta's 20.49. (Reporting by Joel Jose in Bengaluru and Lucy Raitano in London; Editing by Amanda Cooper and Shinjini Ganguli)

Alphabet climbs as AI bets drive ad strength, quelling market fears

(Reuters) -Alphabet shares jumped about 4% on Friday, after a solid earnings report from the Google parent showed investors that its bold bets on AI were fueling growth in the core advertising business, soothing some concerns around competition and tariff-related pressures. Google's advertising revenue rose a better-than-expected 8.5% in the first quarter, in a welcome respite to investors who were worried that a decline in U.S. ad spending amid global trade tensions could significantly dent the digital ad market. Industry data from early April that showed a sharp pullback in U.S. digital ad spending from Temu and Shein - the biggest advertisers on Google Search in the U.S. - further fanned fears. Meanwhile, reports on cloud computing rivals Amazon and Microsoft scaling back on some data center projects had sparked fears that Big Tech might have been overly aggressive in its AI-related outlays, and rising economic uncertainty could be now forcing companies to rethink their plans. "Against the backdrop of negative sentiment and data checks, regulation woes, competition concerns and macro related fears, Alphabet reported a blow to bears, with... strong growth across all major segments," Deutsche Bank analyst Benjamin Black wrote. While Google noted that the Trump administration's recent trade policy changes would cause a "slight headwind" to its ads business this year, executives did not raise any alarm bells on a broad advertising slowdown. Google's report helped lift social media stocks higher on Friday, with Instagram-parent Meta Platforms up 2% and image-sharing platform Pinterest rising 1%. Snapchat-owner Snap climbed about 3%. After announcing a $70 billion share buyback plan, Alphabet also said AI Overviews - the summaries that appear above traditional hyperlinks to relevant webpages - now have 1.5 billion users per month, within about a year after its launch. "Google is in a race versus OpenAI, Perplexity and others to drive AI usage, and we continue to believe Google has data and distribution advantages and has closed the ... performance gap," brokerage BofA Global Research said. Alphabet's 12-month forward price-to-earnings ratio stands at 17.33, trailing Microsoft's 26.56 and Meta's 20.49. The stock has fallen about 16% this year, while Microsoft and Meta have lost some 8% and 9%, respectively. "Perhaps Dr. Google is just what this market needed -- a healthy dose of strong fundamental performance," Bernstein analyst Mark Shmulik said. (Reporting by Joel Jose in Bengaluru and Lucy Raitano in London; Editing by Amanda Cooper and Shinjini Ganguli)

Alphabet quarterly earnings lifted by cloud and AI

SAN FRANCISCO (AFP) - Google parent Alphabet on Thursday reported profit of USD34.5 billion in the recently ended quarter, powered by its cloud computing and artificial intelligence operations. Overall revenue at Alphabet grew 12 per cent to USD90.2 billion compared to the same period a year earlier, while revenue for the cloud unit grew 28 per cent to USD12.3 billion, according to the tech giant. Alphabet chief executive Sundar Pichai said the strong quarterly results reflect healthy growth and momentum across the business. "Underpinning this growth is our unique full stack approach to AI," Pichai said in an earnings release. He touted the latest Gemini software as Alphabet's most intelligent AI model and an "extraordinary foundation" for the Silicon Valley company's innovation. Alphabet shares were up more than three percent in after-market trades that followed the release of the earnings figures. "Cloud grew rapidly with significant demand for our solutions," Pichai said of Alphabet's services and tools hosted at data centers. Investors have been watching closely to see whether the tech giant may be pouring too much money into artificial intelligence. "Cloud's growth indicates that Google AI product mix continues to thrive despite heightened competition," said Emarketer principal analyst Yory Wurmser. Google and rivals are spending billions of dollars on data centers and more for AI, while the rise of lower-cost model DeepSeek from China raises questions about how much needs to be spent. Meanwhile the online ad business that churns out the cash Google invests in its future could be neutered due to a defeat in a US antitrust case. US government attorneys are urging a federal judge to make Google spin off its Chrome browser, arguing artificial intelligence is poised to ramp up the company's online search dominance. The Department of Justice (DOJ) is arguing its position before District Judge Amit Mehta, who is considering "remedies" after making a landmark decision last year that Google maintained an illegal monopoly in online search. "Nothing less than the future of the internet is at stake here," Assistant Attorney General Gail Slater said prior to the start of the hearings this week in Washington. "If Google's conduct is not remedied, it will control much of the internet for the next decade and not just in internet search, but in new technologies like artificial intelligence." Google countered in the case that the United States has gone way beyond the scope of the suit by recommending a spinoff of its widely used Chrome, and holding open the option to force a sale of its Android mobile operating system. The legal case focused on Google's agreements with partners such as Apple and Samsung to distribute its search tools, noted Google president of global affairs Kent Walker. "The DOJ chose to push a radical interventionist agenda that would harm Americans and America's global technology leadership," Walker wrote in a blog post. In another legal battle, a different US judge ruled this month that Google wielded monopoly power in the online ad technology market in a legal blow that could rattle the tech giant's revenue engine. The federal government and more than a dozen US states filed the antitrust suit against Google, accusing it of acting illegally to dominate major sectors of digital advertising. District Court Judge Leonie Brinkema ruled that Google built an illegal monopoly over ad software and tools used by publishers. "Google has willfully engaged in a series of anticompetitive acts to acquire and maintain monopoly power in the publisher ad server and ad exchange markets for open-web display advertising," Brinkema said in her ruling. Online advertising is the driving engine of Google's fortune and pays for widely used online services like Maps, Gmail, and search offered free. Combined, the courtroom defeats have the potential to leave Google split up and its influence curbed.