Alphabet, parent of Google and YouTube, saw a third straight quarter of gains as it reported earnings on Tuesday. The tech giant had largely exceeded analyst expectations for the previous two quarters, and Tuesday’s results showed growth in both digital advertising and demand for Google Cloud.
“The momentum across the company is extraordinary. 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,” said CEO Sundar Pichai.
Analysts expected 12% year-on-year revenue growth, to $86.23bn, and earnings per share of $1.85. Alphabet reported 15% overall growth with $88.27bn in revenue for the quarter, and $2.12 earnings per share. Advertising revenue grew 10%, and cloud services revenue rose 35%. Pichai singled out growth at YouTube in both ads and subscriptions.
Enthusiasm for new artificial intelligence products in recent years has buoyed Google’s stock price, which has increased 20% in 2024 and more than 150% in the past five years. The company has been a leading player in the AI boom, although it is often seen as one step behind the cutting-edge offerings of OpenAI, which has partnered closely with rival Microsoft.
In spite of its success, Google has faced a raft of legal troubles in 2024. The earnings call is the first since the company’s landmark loss in its antitrust case against the US government. Lawyers for the US justice department are weighing a proposal to break up the Android maker after a judge declared it an illegal monopoly. Multibillion-dollar agreements between Google and other tech giants, a focal point of the trial, were deemed anticompetitive; the judge may undo them in the aftermath of the monopoly ruling or separate subsidiaries from the parent company entirely.
Earlier this month, Google was ordered to overhaul the Google Play store as a result of another antitrust loss, to Fortnite maker Epic Games. Google must make Android apps available from competing sources and cannot forbid use of in-app payment methods, according to the judge’s order.
Yet another antitrust trial, which started in September, is ongoing. The US justice department alleges that Google built an illegal monopoly over online advertising.
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Google’s self-driving car division, Waymo, has deployed a fleet of autonomous vehicles in several US cities and begun offering paid rides. The same day as the earnings report, the subsidiary announced it had raised $5.6bn in funding from both its parent and third-party investors. Though not a significant revenue driver compared with the billions generated by advertising, the self-driving car business holds growth potential, Pichai has said.