Google Parent Alphabet said it would buy back $70 billion worth of shares as it reported first-quarter profits exceeding Wall Street’s expectations on Thursday.
Stocks rose 4% in extended transactions, adding about $75 billion to the company’s market value.
Alphabet broke quarterly revenue estimates, benefiting from steady growth in its digital advertising business, offsetting the restrained growth in its cloud computing unit.
President Trump’s trade policy has sparked concerns about a recession and has encouraged businesses to rethink their spending on advertising. However, analysts say the digital advertising market is still in its position in the first quarter.
“Search has been raised by the engagement seen in features such as AI overviews, and now has 1.5 billion users,” CEO Sundar Pichai said in a statement.
Revenue from Google’s flagship advertising business, which accounts for approximately 75% of its overall revenue, rose 8.5% in the quarter to $668.9 billion. This is a slower rate from a 10.6% increase in the last quarter, but surpasses analysts’ expectations of a 7.7% rise.
Google Cloud slowed from its 30.1% growth reported in the last quarter, with revenues rising 28% to $12.26 billion. Analysts were hoping the unit would report revenue of $12.27 billion, according to LSEG data compilation.
According to data compiled by LSEG, the company reported a quarter total revenue of $90.23 billion, compared to an analyst average estimate of $8.912 billion.
According to LSEG data, Alphabet reported earnings of $2.81 per share between January and March, breaking its estimate of $2.01 per share.
Alphabet spent $17.2 billion on quarterly capital expenditures, up 43% from the same period last year.
This was part of the planned $75 billion expenditure that Pichai reaffirmed earlier this month and threatened to cast a shadow over the cost of capital for AI projects.
This was part of the $75 billion expenditure planned this year. AP
Pichai said large investments are needed to build the servers needed to purchase chips and hone the alphabet core products, including search, while supporting the development of AI services such as the Gemini model.
Big Tech continues to defend aggressive AI spending despite macroeconomic pressures and competitive threats from China’s Deepseek. Earlier this month, the CEO of Amazon wrote in a letter writing that he needed to spend $1 billion to stay competitive in the AI space.
However, TD Cowen analysts said last month that Microsoft has abandoned several projects in the US and Europe, so TD Cowen analysts said last month that this week that Amazon has delayed several commitments on new leases.
Alphabet’s results show that demand for digital advertising remains strong, with stocks of rival ad sellers also rising, with meta platforms rising 2%, and Amazon and Snap rising 1% in expanded trade.
