Alphabet’s stock surged 5.5% after the company reported its Q1 2025 earnings, beating market expectations. The tech giant’s earnings per share reached $2.8, significantly higher than the forecasted $2. Sundar Pichai, Alphabet’s CEO, attributed the strong performance to the company’s growing AI adoption across its businesses.
Revenue hit $90 billion, a 12% year-over-year increase. Google Cloud saw a 28% revenue jump to $12.26 billion, with operating profit rising 142%. The cloud business continues to be a key growth driver for Alphabet.
Key Business Highlights
The company’s advertising business, including search and YouTube, exceeded expectations. Waymo, Alphabet’s autonomous driving service, saw a fivefold increase in users compared to the previous year. This growth positions Waymo as a potential new revenue stream for the company.
Alphabet announced a $70 billion share buyback plan, enough to cover the next five quarters. This move aims to return value to shareholders and reflects the company’s confidence in its financial performance.
Challenges Ahead
Despite the positive earnings report, Alphabet faces challenges. The company is dealing with an antitrust lawsuit in the US, which could result in severe penalties affecting its core search and advertising business. Additionally, Alphabet must navigate Europe’s stricter digital platform regulations, which have already impacted companies like Apple and Meta.
The source of this information is Barrons.