The shares of Google parent Alphabet soared in after-market trading on Tuesday after the tech giant reported stronger-than-expected earnings. The company benefited from sturdy results in all departments, particularly the cloud division.
Alphabet’s earnings per share came at $2.12 compared to $1.55 per share in the same period last year, while Wall Street analysts expected $1.85 per share. Its revenue of $88.27 billion revenue marked a 15% year-over-year increase and easily beat the estimates of $86.30 billion.
Alphabet’s cloud division was the company’s best performer, with growth attributed to the introduction of artificial intelligence features. Companies are rushing to get in on the AI wagon, which is leading to larger deals. It accounted for $11.35 billion in revenue, a 35% improvement on $8.41 billion from 2023.
“This business has real momentum, and the overall opportunity is increasing as customers embrace gen. AI,” Google CEO Sundar Pichai said during the earnings call.
Advertising revenue, which makes up the majority of the overall revenue, came at $65.85 billion versus $59.65 billion a year ago. Analysts expected $65.5 billion in ad revenue.
Alphabet’s stock jumped by 1.66% on Tuesday to close at $171.14 per share, being 22.63% up year-to-date. The rise continued in after-hours, with the stock gaining another 5.81% and trading at $181.08 per share.