GOOGL: Alphabet Jumps 5% as AI-Led Blowout Earnings Impress Wall Street

Google parent surprised with a comfortable beat of consensus calls and said that its AI initiatives are boosting the bottom line.

📈 Alphabet Pops as AI Push Powers a Big Beat

• Shares of Google parent Alphabet GOOGL surged 5% in after-hours trading Thursday, as the tech giant delivered a solid first-quarter beat and showed traders and investors that its massive AI investments are translating into serious bottom-line growth.
• Earnings per share came in at $2.81, smashing Wall Street’s $2.01 estimate and climbing from $1.89 a year earlier. Revenue hit $90.23 billion, topping forecasts of $89.17 billion and rising 12% year over year. Net income soared 46% to $34.5 billion.
• Google’s core business — advertising — rose roughly 10% to $50.7 billion, surpassing estimates of between 8% and 9%. That’s good news for the company amid fierce AI chatbot competition, including OpenAI’s ChatGPT, Microsoft’s Copilot and Elon Musk’s Grok.

🤖 AI Overviews Drive Search Growth

• “We’re pleased with our strong Q1 results, which reflect healthy growth and momentum across the business,” said CEO Sundar Pichai. “Underpinning this growth is our unique full stack approach to AI.”
• “Search saw continued strong growth, boosted by the engagement we’re seeing with features like AI Overviews,” Pichai added, referring to AI-generated answers Google now shows at the top of many results pages. “We’re leaning in heavily here, continuing to roll the feature out in new countries, to more users and to more queries.”

☁️ Cloud Scales Up, Cash Keeps Flowing

• Meanwhile, Google Cloud revenue climbed 28% year over year to $12.26 billion — just a hair under forecasts — but operating income more than doubled, surging 142%. That shift toward efficiency was what bulls wanted to see.
• On the investment side, capital expenditures came in just above guidance at $17 billion for the quarter, and Alphabet still expects to spend around $75 billion in 2025. Despite the heavy investment, free cash flow hit $19 billion, up 13% from a year ago.
• Bottom line (pun intended)? Alphabet just delivered the full package — growth in legacy, scale in cloud, and AI fueling both. For a market that’s rattled by trade wars and a game of tariffs, this one stood out.