Alphabet Q3 earnings earnings report demonstrates cloud computing gains & AI boost
Results in the latest earnings report from Google-parent company, Alphabet, beat industry estimates and saw profits and sales increase year on year by 37% and 15% respectively. The report showed progression in both digital advertising and rising demand for Google Cloud services. The company anticipates further increase in AI and data infrastructure spending heading into 2025, while quashing apprehensions over Google being divided up following recent court findings.
Speaking on the quarterly results, CEO Sundar Pichai recounted; “The momentum across the company is extraordinary. 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.”
This week Alphabet’s stock price surged 6%, with the AI portfolio credited as attracting new customers and leading to larger deals, as Sunar explained “This business has real momentum, and the overall opportunity is increasing as customers embrace gen AI.” It was at the start of this year that the company renamed their Gen AI chatbot Bard to Gemini promoting it as an assistant for planning or ideation, and integrating into Google Assistant, Maps and Extensions.
Google still faces intense competition from Meta AI, Bing Chat and the SearchGPT, with the evolution of search engines to question-and-answer engines changing how users research and browse online. The question remains as to how this new user experience will affect the historical advertising model that played such a huge part in the company’s earnings to date.
Beyond search, YouTube has continued to be a significant profit centre for Alphabet, with revenue increasing 12% year on year. Reflecting the ongoing fragmentation of the AV market ad advertisers seek to make up for declining viewership on linear TV. Content from the 2024 Paris Olympics went a long way towards this growth, with 12 billion views on YouTube, with 35% of viewing time on TV screens. In addition to advertising, YouTube Premium subscriptions boosted the platform’s revenue, which surpassed $50 billion over the past four quarter for the first time.
Heading into Q4 and 2025, as well as competition in the market, Alphabet continues to face numerous antitrust cases, alleging the company is monopolising the marketplace and search services. While challenges may still lay ahead for Alphabet, short-term impacts on earnings seems unlikely for now as we head into a new and unprecedented era in the online space.
Sources: BBC, Yahoo.
