Google parent’s stock price soars as it reports growth in quarter
Google’s corporate parent, Alphabet Inc., on Thursday released a quarterly report showing it’s still reaping double-digit revenue gains from its digital advertising empire while sowing potentially lucrative new ground in artificial intelligence.
The results for the first three months of the year provided the latest evidence that Google has regained its momentum after an unprecedented downturn in 2022 coming out of the COVID-19 pandemic.
In the January-March period, Alphabet’s revenue rose 15% from the same time last year to $80.54 billion, which surpassed the projections of analysts surveyed by
FactSet Research. It marked the fourth consecutive quarter of accelerating year-over-year revenue growth for the Mountain View, Calif., company.
Alphabet earned $23.66
billion, or $1.89 per share, a 57% increase from last year’s comparable quarter. The earnings per share also eclipsed the analyst estimates that steer investors.
The company’s stock price soared by nearly 13% in Thursday’s extended trading after the results came out. That reaction was a stark contrast to how investors responded to a report covering the same quarter from Facebook’s parent.
Meta Platforms also reported a surge in ad revenue but provided a disappointing outlook for the April-June period, while warning that its profits would be squeezed by increased spending on AI technology.
As has been the case since the company went public 20 years ago, most of the money came in through a digital advertising network anchored by Google’s dominant search engine. Google’s ad revenue totaled $61.66 billion in the first quarter, up 13% from last year.
Despite the ongoing success, Google is facing dual threats that could threaten its growth.
The U.S. Department of Justice is taking aim at its search engine in a lawsuit alleging that the company has abused its power by negotiating lucrative deals with Apple and other companies to give it an unfair advantage over potential rivals, stifling innovation as well as competition.
People also may not need to rely as much on Google’s search information to answer their questions and find other information as the artificial intelligence technology that Google, Microsoft and other tech stalwarts are building becomes more sophisticated.