Tech company’s sunny report shows rebound despite 2022 challenges, job cuts.
Alphabet’s stocks surged in after-hours trading on Tuesday, surpassing Wall Street’s Q2 profit expectations, driven by increased advertising revenue and AI growth.
The company posted earnings of $1.44 per share in the April-June period, beating the estimated $1.34 per share. Revenue for the quarter was $74.6 billion, exceeding the estimated $72.82 billion, as per Refinitiv data.
The growth is partly credited to the consistent demand for Google Cloud services, projected to rise further due to increasing adoption of artificial intelligence (AI) tools.
“In a statement, Sundar Pichai, the CEO of Alphabet and Google, expressed enthusiasm about the exciting momentum driving strong results this quarter. He highlighted their continued leadership in AI, engineering, and innovation, propelling the next evolution of Search and enhancing all services.”
“Advertisers, who had reduced spending due to economic challenges in recent years, are now retreating from more volatile platforms like Twitter (now renamed “X”). This trend is benefiting companies like Alphabet and Facebook-owner Meta Platforms, leading to a rebound in their fortunes.”
This marks the second earnings report from Alphabet indicating potential recovery following a challenging year for the company. The first-quarter earnings, reported in April, showcased an unexpected revenue increase. Despite having cut over 12,000 jobs (6% of its global workforce) in January, the company now presents a sunnier outlook.
Alphabet’s growth spanned various sectors, with ad revenue rising 3.3% to $58.14 billion from last year’s $56.29 billion. While YouTube contends with competition from TikTok, the platform’s ad revenue rose to $7.67 billion, up from $7.34 billion the previous year.
“Google’s solid position in the digital advertising market is bolstered by modest growth from YouTube and Search,” stated the speaker, emphasizing the company’s advantageous position. “With careful execution of its well-crafted plans, Google aims to lead advertisers and consumers into an AI-powered future while avoiding any mishaps.”
In the ongoing AI race, Alphabet has emphasized its long-standing work in this field and continuous investment in technology. During an investor call, Pichai highlighted Alphabet’s plans to integrate AI across its portfolio, leveraging the technology to enhance cybersecurity, search products, and advertising.
