Google’s Parent Company Alphabet Inc. Beats Wall Street Estimates
A Strong Third Quarter for Alphabet Inc.
Alphabet Inc., the parent company of Google (GOOG), has reported a strong third quarter with its share price jumping 5.9% after-hours as its results beat Wall Street earnings and revenue estimates. The tech giant’s quarterly revenues hit $88.27 billion, rising 15% from the same quarter a year ago, and beating the expected estimate by 2.2%. Its quarterly earnings rose 35% from Q3 2023 to $2.12 per share, surpassing the estimated earnings per share of $1.85 by 13.6%.
Revenues and Earnings Per Share
- Quarterly revenues: $88.27 billion (up 15% year-over-year)
- Quarterly earnings: $2.12 per share (up 35% from Q3 2023)
Google Cloud’s Strong Performance
Google Cloud revenues jumped 35% year-on-year to $11.4 billion, with Alphabet attributing the growth to its AI infrastructure and generative AI products. The company’s investment in artificial intelligence is paying off, driving success for both the company and its customers.
CEO Sundar Pichai on AI
On an earnings call on October 29, Alphabet and Google CEO Sundar Pichai said, "The long-term focus and investment in AI are paying off and driving success for the company and for our customers." He also mentioned that more than a quarter of all new code at Google is generated by AI, which has boosted productivity.
Google’s AI Advancements
In August, Google shipped its latest top-of-the-range AI model, Gemini 1.5 Pro, which beat the then industry-leading GPT-4 from OpenAI in benchmarking tests. This marks a significant achievement for Google in the field of artificial intelligence and sets it apart from its competitors.
Google Ads Business
The largest revenue generator for Alphabet was its Google Ads business, which brought in $65.86 billion in Q3, up 10.4% from the year-ago quarter. Its flagship Google Search business was its second-biggest contributor, with $49.39 billion in revenues, up 10.9% from 2023’s third quarter.
Artificial Intelligence and Big Tech
The so-called MAMAA stocks (Meta, Amazon, Microsoft, Alphabet, and Apple) have seen significant price increases this year due to their heavy investment in artificial intelligence models, AI partnerships, or pushing out new hardware to support the compute-intensive technology. Meta and Microsoft are scheduled to report their earnings on October 30, followed by Amazon and Apple’s reports on October 31.
Conclusion
Alphabet Inc.’s strong third quarter results come ahead of earnings for its Big Tech rivals this week. The company’s continued investment in AI is driving success and paying off in the long term. As the tech industry continues to evolve with artificial intelligence at its forefront, Alphabet’s performance will be closely watched by investors and analysts alike.
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