New York, NY – Google’s parent company, Alphabet, saw its market capitalization exceed $2 trillion on Friday after announcing impressive quarterly results that surpassed revenue and earnings expectations. The company also revealed a new cash dividend program of $0.20 per share and authorized stock repurchases of up to $70 billion.
CEO Sundar Pichai attributed the strong performance in the first quarter to the success of Search, YouTube, and Cloud services. He emphasized the company’s leadership in AI research and infrastructure, positioning Alphabet well for the next wave of AI innovation.
Alphabet’s market cap reached $2.15 trillion during early afternoon trading on Friday, with its stock experiencing a 10% increase. Revenue, excluding traffic acquisition costs, climbed 16% year-over-year to $67.59 billion, surpassing analyst estimates. Additionally, the company reported an adjusted earnings per share of $1.89, exceeding consensus forecasts of $1.53.
Despite previous perceptions that Google was falling behind in AI compared to competitors like Microsoft, company executives expressed confidence during the earnings call that Google is prepared to lead the transition to an AI-centric tech world. Pichai highlighted the potential to monetize AI breakthroughs through various channels such as advertising, cloud services, and subscriptions.
While concerns exist about the costs associated with AI investments, Alphabet’s commitment to advancing AI technologies was evident in its capital expenditures of $12 billion for the quarter, primarily allocated to servers and data centers. CFO Ruth Porat confirmed that similar levels of spending can be expected in the future to support ongoing AI investments.
In the cloud sector, Alphabet saw a nearly 30% increase in revenue compared to the same period last year, reaching over $9 billion. The company’s cloud business has been steadily growing as it aims to capture more market share in a space dominated by Amazon and Microsoft.
Despite uncertainties surrounding the impact of AI on Google’s search business, investors remain optimistic about Alphabet’s future prospects. The company’s focus on AI innovation and continued investments in the technology signal its strategic vision for the future.
