Alphabet Inc. (NASDAQ:GOOG, GOOGL) reported robust third-quarter results that surpassed Wall Street expectations, fueled by solid performance across its core advertising business and rapidly growing cloud computing segment driven by artificial intelligence (AI) tailwinds.
The tech giant reported earnings of $2.12 per share for the quarter ended September 30, beating analysts' consensus estimate of $1.84 per share. Revenue climbed 15% year-over-year to $88.27 billion, exceeding the expected $86.31 billion.
The company's flagship Google Search business delivered $49.4 billion in revenue, up 12% from the prior year, while YouTube ad sales grew 12% to $8.9 billion. Overall, Google's advertising revenue increased 10.4% to $65.9 billion, underlining the resilience of its core business.
However, the standout performer was Google Cloud, which saw revenue surge 35% to $11.4 billion. Alphabet CEO Sundar Pichai highlighted the positive impact of the company's AI solutions, stating, "In Cloud, our AI solutions are helping drive deeper product adoption with existing customers, attract new customers and win larger deals."
Pichai emphasized that Alphabet's long-term focus and investments in AI are paying off, benefiting consumers and partners alike. The company's AI-powered search overviews, which provide AI-generated summaries, are now reaching over 1 billion users monthly, with ads in these overviews performing well.
