April 26, 2025

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Alphabet Beats Expectations with $90.2B Revenue, Google AI Investments Pay Off

Alphabet, the parent company of Google, has reported strong first-quarter earnings, beating expectations with a revenue of $90.2 billion and a net income of $34.5 billion. The company's ad revenue saw an 8.5% increase to $66.89 billion, driven by its AI-powered ad business. Google's AI investments are paying off, with its AI-powered search feature, AI Overviews, now having 1.5 billion users per month. The company's cloud business also saw significant growth, with revenue up 28% to $12.26 billion. Alphabet has committed to investing $75 billion in AI this year, despite macroeconomic uncertainties. The company's strong earnings report has had a positive impact on the tech sector, with Asian technology and chipmaking stocks rising. Other companies, such as Baidu, are also investing heavily in AI, with the Chinese search engine giant upgrading its flagship AI models and slashing their prices. However, the AI boom is under threat from tariffs and global economic turmoil, which could increase the cost of data center equipment and disrupt supply chains. Despite this, analysts remain bullish on data centers and AI stocks, with many expecting significant growth in the sector.

Key Takeaways

  • Alphabet reported strong first-quarter earnings, with revenue of $90.2 billion and net income of $34.5 billion.
  • The company's ad revenue saw an 8.5% increase to $66.89 billion, driven by its AI-powered ad business.
  • Google's AI-powered search feature, AI Overviews, now has 1.5 billion users per month.
  • Alphabet's cloud business saw significant growth, with revenue up 28% to $12.26 billion.
  • The company has committed to investing $75 billion in AI this year, despite macroeconomic uncertainties.
  • Asian technology and chipmaking stocks rose after Alphabet's strong earnings report.
  • Baidu upgraded its flagship AI models and slashed their prices, with the price of the 4.5 Turbo 80% lower than its previous version.
  • The AI boom is under threat from tariffs and global economic turmoil, which could increase the cost of data center equipment and disrupt supply chains.
  • Analysts remain bullish on data centers and AI stocks, with many expecting significant growth in the sector.
  • Alphabet's stock jumped 5% after the company reported strong first-quarter earnings, with several analysts raising their price targets for the stock.

Alphabet Beats Earnings Expectations

Alphabet, the parent company of Google, reported strong first-quarter earnings that beat expectations. The company's revenue was $90.2 billion, a 12% increase from last year, and its net income was $34.5 billion, a 46% increase. The company's ad revenue was $66.8 billion, and its Google Cloud revenue was $12.3 billion, up 28% from last year. Alphabet also announced a $70 billion stock-buyback program and a 5% increase in its quarterly cash dividend. The company's CEO, Sundar Pichai, said that AI is driving growth in the company's search and ad businesses.

Google AI Investments Pay Off

Google's parent company, Alphabet, reported strong first-quarter earnings, with revenue and profit beating expectations. The company's ad revenue rose 8.5% to $66.89 billion, driven by its AI-powered ad business. Google's CEO, Sundar Pichai, said that the company's AI investments are paying off, and that its AI-powered search feature, AI Overviews, now has 1.5 billion users per month. The company also reported strong growth in its cloud business, with revenue up 28% to $12.26 billion.

Google Commits to AI Investments

Google's parent company, Alphabet, has committed to investing $75 billion in AI this year, despite macroeconomic uncertainties. The company's CEO, Sundar Pichai, said that AI is a key area of investment for the company, and that it will continue to spend heavily on AI research and development. The company's chief business officer, Philipp Schindler, said that the company is not immune to macroeconomic uncertainty, but that it is well-positioned to weather any potential downturn. Alphabet also reported strong first-quarter earnings, with revenue and profit beating expectations.

Asia Tech Stocks Rise

Asian technology and chipmaking stocks rose on Friday, tracking overnight gains in their US peers after strong earnings from Alphabet and positive comments on artificial intelligence. Chinese search engine giant Baidu rose 4% in Hong Kong trade after launching updated versions of its flagship AI models. Other tech stocks, including Tencent Holdings and Alibaba, also rose after Alphabet's strong earnings report. The gains came as investors remained hopeful that AI will continue to drive growth in the tech sector.

Google AI Investments Pay Off

Google's parent company, Alphabet, reported strong first-quarter earnings, with revenue and profit beating expectations. The company's ad revenue rose 8.5% to $66.89 billion, driven by its AI-powered ad business. Google's CEO, Sundar Pichai, said that the company's AI investments are paying off, and that its AI-powered search feature, AI Overviews, now has 1.5 billion users per month. The company also reported strong growth in its cloud business, with revenue up 28% to $12.26 billion.

Baidu Upgrades AI Models

Baidu, the Chinese search engine giant, has upgraded its flagship AI models and slashed their prices. The company launched Ernie 4.5 Turbo and Ernie X1 Turbo, which are faster and cheaper than previous iterations. Baidu's founder, Robin Li, said that the price of the 4.5 Turbo is 80% lower than its previous version, and that the X1 Turbo has cut its price by half. The company also launched a slew of new products, including an AI agent platform and new servers that allow developers to connect their AI models to Baidu's search engine and e-commerce data.

AI Boom Threatened by Tariffs

The AI boom is under threat from tariffs and global economic turmoil. The tariffs imposed by the Trump administration could stall the growth of the AI industry, which has been driven by investments from tech giants such as Alphabet and Microsoft. The tariffs could increase the cost of data center equipment and disrupt supply chains, making it more difficult for companies to invest in AI. Analysts say that the tariffs could have a significant impact on the US economy, with J.P. Morgan estimating that spending on data centers could contribute between 10 and 20 basis points to the country's economic growth in 2025-2026.

Alphabet Stock Jumps 5%

Alphabet's stock jumped 5% after the company reported strong first-quarter earnings. The company's revenue was $90.23 billion, beating expectations of $89.17 billion, and its earnings per share were $2.81, beating expectations of $2.01. The company's CEO, Sundar Pichai, said that the company's AI initiatives are driving growth, and that the company is seeing strong growth in its search and cloud businesses. The company's capital expenditures were $17 billion, and it expects to spend around $75 billion in 2025.

Jim Cramer Bullish on Data Centers

Jim Cramer, the host of CNBC's Mad Money, remains bullish on data centers and AI stocks despite growing skepticism on Wall Street. Cramer said that the data center boom is not slowing down, and that companies such as Amazon and Nvidia are still spending big on data centers. He also said that if trade tensions ease and AI enthusiasm resurges, several sectors are poised for significant growth, including semiconductors, server and networking gear, and data center builders and power suppliers.

Alphabet Stock Climbs

Alphabet's stock climbed after the company reported strong first-quarter earnings and several analysts raised their price targets for the stock. The company's Class A shares were up close to 3% near $164, propelling it into the ranks of the best-performing stocks on the S&P 500. Citi analysts raised their price target to $200, pointing to growing usage and monetization of AI features in Search, including AI Overviews. Other analysts, including Bank of America and Wedbush, also raised their price targets for the stock.

Sources

Alphabet Google AI Artificial Intelligence Earnings Stock Market