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Alphabet shares rose after it reported first-quarter profit surged 46 per cent, driven by another strong performance in its search business and a boom in artificial intelligence-related demand for cloud computing power.
Net income jumped to $34.5bn compared with $23.7bn in the same three month period a year earlier, the parent company of Google reported on Thursday.
Google’s core search and advertising business grew almost 10 per cent to $50.7bn in the quarter, surpassing estimates for between 8 and 9 per cent.
The cloud computing division reported a 28 per cent surge in revenue to $12.3bn, showing continued demand for its data centre and network services from the boom in AI. However, this slowed from 30.1 per cent in the prior quarter.
“Search saw continued strong growth, boosted by the engagement we’re seeing with features like AI Overviews,” said chief executive Sundar Pichai, referring to AI-generated answers it now shows at the top of many results pages. “Cloud grew rapidly with significant demand for our solutions.”
Alphabet shares rose about 4 per cent in after-market trading.
Google is the second Big Tech company to report earnings in the wake of US President Donald Trump’s global trade war. Alphabet shares have fallen about 17 per cent this year. Like most of its rivals, the company has been affected by concerns about tariffs disrupting supply chains and softening consumer spending, promoting fears of a US recession.
Revenues rose 12 per cent to $90.2bn in the three months to the end of March.
Earlier this week, Tesla warned that tariffs would have an “outsized” impact on its battery business that relies on components from China. Chief executive Elon Musk pledged to continue to lobby Trump in favour of free-trade principles.
Alphabet’s spending on data centres, chips and other AI infrastructure continued to escalate. First-quarter capital expenditure jumped to $17.2bn, up from $12bn last year and slightly more than the $17.1bn estimate. The company has forecast spending will reach $75bn this year, up from $53bn in 2024. Alphabet also said it would buy back $70bn of shares.
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