Alphabet Inc. exceeded Wall Street’s quarterly sales estimates, driven by heightened demand for its cloud and AI services. In after-hours trading, shares surged by 7.5%. The company reported third-quarter sales of $87.5 billion, surpassing the $85.1 billion forecast. Google Search ads generated $56.6 billion, with signs that market share losses to ChatGPT have stabilized. CEO Sundar Pichai highlighted that Alphabet’s substantial investments in AI are yielding significant business results, with AI-driven product revenue skyrocketing over 200% year-on-year. The cloud segment also thrived, with a 33.5% revenue increase to $15.2 billion. Notably, Google’s cloud unit achieved a profit of $3.59 billion and boasts a backlog of $155 billion in contracts. Meanwhile, YouTube generated $10.3 billion, exceeding expectations. While Alphabet’s innovative ventures, including Waymo, continue to expand, ongoing competition from AI players like OpenAI poses challenges for Google’s ad revenue.
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