Strong demand for ads and cloud services powered tech giant’s growth as it makes multibillion-dollar AI investment
Google’s parent company, Alphabet, displayed steady growth in its core advertising business and cloud computing division as it reported third-quarter earnings on Wednesday, beating Wall Street estimates as it reported its first quarter of $100bn in revenue.
The company thrilled Wall Street – shares rose in after-hours trading – even as it announced that it would spend billions more than previously predicted. Alphabet raised its capital expenditure guidance in financial filings, declaring it would spend between $91bn and $93bn in the upcoming year, nearly all of it on infrastructure like datacenters to support artificial intelligence products, which are becoming an integral part of the company’s business. That estimate is up from an original declaration of $75bn in February and a revised figure of $85bn announced in July.
The company reported total revenue of $102.35bn for the quarter, compared with analysts’ average estimate of $99.89bn, according to data compiled by LSEG.
Google Cloud remained one of Alphabet’s fastest-growing segments, benefiting from surging enterprise demand for AI-powered infrastructure and data analytics services. The unit posted revenue of $15.16bn, topping estimates of $14.72bn. The performance was probably boosted by burgeoning enterprise demand for its AI infrastructure.
