Alphabet shares rise on stronger-than-expected revenue growth

Alphabet’s CEO, Sundar Pichai, had a meeting with Polish Prime Minister Donald Tusk at Google for Startups in Warsaw, Poland, on February 13, 2025.

Alphabet, the parent company of Google and YouTube, surpassed analysts’ expectations with its first-quarter growth. After the bell, shares surged by over 5% in after-hours trading. The company’s revenue was reported at $90.23 billion compared to the expected $89.12 billion, and earnings per share were $2.81 versus the expected $2.01.

Among the key figures in the report that Wall Street is closely monitoring are YouTube advertising revenue, Google Cloud revenue, and Traffic Acquisition Costs (TAC). Despite the increasing competition in artificial intelligence, Alphabet’s search and advertising units are demonstrating robust growth according to its first-quarter financial results.

Google’s YouTube advertising revenue slightly missed analysts’ predictions at $8.93 billion. The overall advertising revenue reached $66.89 billion, marking an 8.5% increase from the previous year.

Alphabet’s net income soared by 46% to $34.54 billion, or $2.81 per share, from $23.66 billion, or $1.89 per share, in the previous year. The company attributed this increase to $8 billion in unrealized gains on its nonmarketable equity securities related to its investment in a private company.

Alphabet’s cloud computing business reported revenue of $12.26 billion, slightly lower than the anticipated $12.27 billion. However, the cloud unit saw a 28% year-over-year revenue increase with margins at 17.8%, up from 9.4% in the previous year.

Alphabet made its biggest acquisition to date in March, agreeing to acquire Wiz for $32 billion in cash. The company expects the deal to be finalized next year, pending regulatory approvals.

Additionally, Alphabet’s “Other Bets” segment, which includes Waymo and Verily, brought in $450 million, down 9% from the previous year. Waymo has been providing over 250,000 fully autonomous paid rides per week across various regions.

Alphabet’s Chief Financial Officer, Anat Ashkenazi, highlighted that the company plans to invest around $75 billion in capital expenditures this year, with potential fluctuations in investment levels due to changes in delivery and construction schedules.

Alphabet’s board also authorized the repurchase of an additional $70 billion in shares, as was done a year prior.