Alphabet Inc. said on April 29 that its first-quarter results reflected continued momentum behind Google’s artificial intelligence push, with profit up sharply and revenue topping $100 billion for the January-March period. The Associated Press said Alphabet earned $62.6 billion, or $5.11 per share, during the quarter, an 81% increase from the same time last year. The company also reported revenue climbed 22% year over year to $109.9 billion, figures the AP said exceeded analyst projections.
The AP reported that Alphabet’s shares jumped more than 6% in extended trading after the earnings were released, setting up the stock to reach a new high during Thursday’s regular session. It said Alphabet’s market value currently stands at $4.2 trillion, up from $1.9 trillion a year earlier, and suggested continued gains if the stock tracks a similar trajectory. The market reaction arrived as investors assessed how Alphabet’s spending on AI is translating into business performance.
Alphabet’s performance drew attention as other large technology firms faced different investor reactions tied to their own AI strategies. The AP said Microsoft and Meta Platforms, which it described as major AI spenders, saw their stock prices fall in extended trading after disclosing strategies that investors second-guessed. It also reported that Microsoft’s shares dipped even after posting quarterly results that topped analyst forecasts.
In discussing the quarter, Alphabet’s CEO Sundar Pichai pointed to AI as a driver across the company’s operations. The AP reported Pichai as saying: “are lighting up every part of the business.” The AP linked Alphabet’s results to Google’s advertising business, saying digital ads fueled growth as revenue from those operations rose 16% from the prior year.
The AP also said Google’s Cloud division remained the fastest-growing part of Alphabet, benefiting from demand tied to the AI boom. It reported Cloud revenue surged 63% from last year to $20 billion, and it cited a recently announced deal with the U.S. military as an example of the kind of customer work the division is pursuing. The quarter’s combination of ad strength and cloud growth helped support the broader picture of AI investment paying off so far, the AP said.
Still, the AP noted that investors continue to weigh whether major tech companies, including Alphabet, are spending too much for a technology that remains early in its development. Alphabet has forecast higher capital spending as it builds out infrastructure for AI, and the AP pointed to a February disclosure that the company expects to spend between $175 billion and $185 billion on capital expenditures this year, largely for AI data centers and related tools. The AP further reported that Alphabet’s top finance executive, Anat Ashkenazi, told analysts on a conference call that capital expenditures could climb as high as $190 billion this year and that spending could “significantly increase” again next year.
In the AP’s account, the quarter’s takeaway was that Alphabet is no longer asking investors to underwrite AI spending primarily on faith. The AP quoted an Investing.com analyst, Thomas Monteiro, saying, “The key message is that Alphabet is no longer asking investors to underwrite AI spending on faith,” tying the market’s response to results that show stronger growth. The AP also referenced Alphabet’s prior-year capital expenditures of $91 billion to contextualize how the company’s infrastructure buildout is accelerating.