Google parent Alphabet ( GOOG , GOOGL ) reported fiscal third-quarter earnings after the bell on Tuesday that beat analysts’ estimates to the top and bottom line as its cloud business continued to expand and Big Tech posted strong earnings.
For the quarter ended Sept. 30, the company reported earnings of $2.12 per share on revenue of $88.27 billion. This was a 37% and 15% increase in profit and sales respectively for the same period last year.
Analysts had expected earnings of $1.83 per share on revenue of $86.44 billion, according to data compiled by Bloomberg.
Alphabet shares rose 4% in after-hours trading on Tuesday.
Advertising revenue rose to $65.85 billion, beating analysts’ expectations of $65.5 billion and up from $59.65 billion a year earlier.
Google CEO Sundar Pichai highlighted the cloud unit’s growth in an earnings call on Tuesday, noting that the company’s AI portfolio is attracting new customers and leading to bigger deals. Cloud revenue came in at $11.4 billion, up 35% from the same period last year and beating expectations.
Cloud revenues are on the rise as rivals Microsoft ( MSFT ) and Amazon ( AMZN ) are also expected to grow their cloud businesses and increase investments in AI infrastructure.
Google is also facing competition on its home turf with the introduction of increasingly sophisticated AI-powered chatbots. Monday Information has been provided Meta (META) is building its own search engine to power its Meta AI chatbot, providing conversational responses to users’ questions and prompts.
How next-generation answer engines compete with Google’s traditional and AI-enhanced search remains a key question for the company.
Google is the first of the big tech sites to report this week, with Meta and Microsoft set to release quarterly results on Wednesday, followed by Amazon ( AMZN ) and Apple ( AAPL ). While all megacaps have posted share price gains so far this year, stocks have charted divergent paths as investors don’t measure their AI spending and the success of their business lines in lockstep.
Hamza Shaban is a correspondent for Yahoo Finance, covering markets and economics. Follow Hamza on X @hshaban.
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