Alphabet, the parent company of search giant Google, reported second quarter earnings on Wednesday that strongly beat Wall Street estimates led by new AI features and a steady digital advertising market. The company also announced a hike in capex plans for 2025, and predicted a further increase next year.
Alphabet reported a net profit of $28.2 billion, or $2.31 per share, during the April-June quarter, registering a growth of 19% from the same time last year. The company’s revenue rose 14% from a year ago to $96.4 billion, beating analysts’ projections, driven by Google cloud’s sales.
Google’s cloud-computing unit reported quarterly revenue of $13.6 billion, up nearly 32% and well above estimates for a 26.5% increase. Its operating income of $2.83 billion also topped analysts’ projections.
YouTube, Google’s video site, reported ad revenue of $9.8 billion during the second quarter, exceeding analysts’ estimates of $9.56 billion. Alphabet’s Other Bets, a collection of futuristic businesses that includes the self-driving car effort Waymo, generated $373 million in revenue, missing estimates for $429.1 million.
Alphabet hiked its capital expenditure plans for the year to about $85 billion, or $10 billion greater than an earlier forecast, and predicted a further increase next year, citing massive demand for its cloud computing services.
“With this strong and growing demand for our Cloud products and services, we are increasing our investment in capital expenditures,” CEO Sundar Pichai said in an earnings release.
Alphabet Share Price Performance
Alphabet share price ended 0.31% lower at $191.51 apiece on Wednesday ahead of the earnings announcement post-market hours. However, the stock rose 1.72% in after-market trades. The stock has risen more than 18% since its previous earnings report in April.
The shares of Google-parent have rallied 15% in the past one month, while the stock has remained flat on a year-to-date basis. Alphabet shares have gained 4% in the past one year.
(With inputs from Agencies)
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