Google’s parent company, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), saw a remarkable surge of up to 13% in after-hours trading on Thursday, propelled by an exceptional quarter that surpassed revenue and earnings projections. Investor enthusiasm soared as Alphabet announced its inaugural cash dividend program of $0.20 per share, alongside an authorization for stock repurchases of up to an additional $70 billion.
CEO Sundar Pichai attributed the robust performance to the stellar contributions from Search, YouTube, and Cloud services. Pichai expressed confidence in Alphabet’s leadership in AI research and infrastructure, citing its global product reach as a strong foundation for future AI innovations.
Here’s a breakdown of Alphabet’s key metrics for the fiscal fourth quarter, compared to Wall Street estimates:
- Revenue, excluding traffic acquisition costs: $67.59 billion vs. expected $66.07 billion
- Adjusted earnings per share: $1.89 vs. expected $1.53
- Cloud revenue: $9.58 billion vs. expected $9.37 billion
- Ad revenue: $61.66 billion vs. expected $60.18 billion
While Google has been perceived as lagging behind in AI compared to industry frontrunner Microsoft (NASDAQ:MSFT), executives emphasized Alphabet’s readiness to spearhead the AI-driven technological landscape. The company reiterated its commitment to investments fostering AI advancements, with clear strategies for monetization through advertising, cloud services, and subscriptions.
Alphabet has intensified its efforts to capture a larger share of the cloud market, marking substantial growth with a nearly 30% increase in cloud revenue year-over-year. This strategic push places Alphabet in a competitive position against cloud giants like Amazon (NASDAQ:AMZN) and Microsoft.
The buoyant performance of Alphabet contrasted sharply with the subdued outlook presented by its advertising rival, Meta (NASDAQ:META), which forecasted a lackluster Q2 and highlighted escalating expenses. Meta acknowledged a prolonged timeline before AI investments yield substantial returns, underscoring Alphabet’s strategic advantage in navigating the evolving tech landscape.
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