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Google (GOOGL+0.33%) parent Alphabet saw its share price rise almost 5% during midday trading on Wednesday after delivering earnings that surpassed Wall Street’s expectations.
Consolidated Alphabet revenues grew 15% year over year to $88.3 billion, “reflecting strong momentum across the business,” the company said. Net income increased 34%, and earnings per share, or EPS, increased 37% to $2.12. The company’s cloud division revenues grew 35% to $11.4 billion due to “accelerated growth in Google Cloud Platform across AI infrastructure, Generative AI Solutions, and core GCP products,” it said.
Alphabet’s shares were up 1.66% at the market close on Tuesday and were up around 6.4% during pre-market trading on Wednesday. The company’s shares are up around 28.5% so far this year.
The company was expected to report revenues of $86.4 billion and EPS of $1.84 for the third quarter, according to analyst estimates compiled by FactSet (FDS-1.19%).
“The momentum across the company is extraordinary,” Google chief executive Sundar Pichai said in a statement. “Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools.”
In its cloud unit, Google’s “AI solutions are helping drive deeper product adoption with existing customers,” as well as attracting new customers and larger deals, he said.
On the company’s earnings call, Pichai said Google engineers are currently using AI to generate more than a quarter of all new code at the company, which they then have to review and accept. Using AI for coding “is boosting productivity and efficiency,” he said.
Meanwhile, Google’s AI Overview search feature will now reach over 1 billion users each month after rolling out to more than 100 new countries and territories, Pichai said, adding that AI Overview is seeing stronger engagement, and users are asking “longer and more complex questions.” Integrating ads into AI Overview is also driving connections between consumers and businesses, he said.
Pichai said Google is “excited” for Nvidia’s (NVDA-5.05%) new Blackwell AI chips and expects to “be one of the first to provide [them] at scale.”