Google beats third-quarter earnings expectations on AI momentum
Google parent Alphabet reported revenues of $88.3 billion for the third quarter
Google parent Alphabet surpassed Wall Street’s expectations, reporting revenues of $88.3 billion for the third quarter.
Consolidated Alphabet revenues grew 15% year over year, the company said, “reflecting strong momentum across the business.” The tech giant reported net income increased 34%, and earnings per share, or EPS, increased 37% to $2.12. Google’s shares were up 1.66% at the market close on Tuesday, and were up 2.25% during after hours trading. The company’s stock has climbed 22.6% so far this year.
“The momentum across the company is extraordinary,” Google chief executive Sundar Pichai said in a statement. “Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools.”
Google was expected to report revenues of $86.4 billion and EPS of $1.84 for the third quarter, according to analyst estimates compiled by FactSet.
The company’s Cloud division revenues grew 35% to $11.4 billion due to “accelerated growth in Google Cloud Platform across AI infrastructure, Generative AI Solutions, and core GCP products,” it said.
In mid-October, analysts at Bank of America Global Research said they expected to see search strength in the third quarter “suggesting AI is driving higher monetization,” as well as “positive commentary” from Google on how its AI Overviews feature is “driving higher usage, or new advertising opportunities.”
“In Search, our new AI features are expanding what people can search for and how they search for it,” Pichai said. “In Cloud, our AI solutions are helping drive deeper product adoption with existing customers, attract new customers and win larger deals.”