- Alphabet reported quarterly revenue of $96.4 billion, exceeding Wall Street expectations.
- Artificial Intelligence efforts helped drive growth in Google‘s core businesses.
- Revenue from cloud and advertising segments surpassed forecasts.
- Capital expenditure projections rose to $85 billion, up from $75 billion.
- Despite strong earnings, Alphabet shares fell amid worries over higher spending and a pending antitrust case.
Alphabet posted $96.4 billion in revenue for the last quarter, surpassing analysts’ forecasts of $94 billion. The report highlighted strong gains across major segments as the company increased its investments in artificial intelligence.
Adjusted earnings per share (EPS) came in at $2.31, beating the expected $2.17. Revenue excluding traffic acquisition costs (TAC) reached $81.2 billion, higher than the anticipated $79.6 billion. In the same period last year, Alphabet posted $71.3 billion in revenue.
Chief Executive Sundar Pichai stated, “AI is positively impacting every part of the business, driving strong momentum. Search delivered double-digit revenue growth, and our new features, like AI Overviews and AI Mode, are performing well. We continue to see strong performance in YouTube as well as subscriptions offerings. And Cloud had strong growth in revenues, backlog and profitability. Its annual revenue run-rate is now more than $50 billion.”
Despite these financial results, some investors expressed concern after Alphabet announced higher capital expenditure estimates. The company now expects to spend $85 billion, up from a previous projection of $75 billion. This increase is aimed at expanding artificial intelligence capabilities, including investments in data centers and advanced computer chips.
Elsewhere, Alphabet continues to face legal pressure as it awaits a ruling in its antitrust case related to Google Search. The U.S. Department of Justice recently won a decision, and some analysts have cautioned that penalties could force the company to divest its Chrome web browser, an important profit driver.
Despite the beat on earnings, Alphabet‘s shares fell by around 2% after the announcement. For more financial industry updates, see Goldman Sachs, BNY Launch Digital Tokens Tied to Money Market.
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