Alphabet's Revenue Soars: AI and Digital Ad Surge

Alphabet exceeded revenue and profit expectations in the third quarter, driven by significant expansion in digital advertising and cloud services. The company's investments in AI are credited with boosting its performance, with notable revenue increases in YouTube and Google's cloud platform.

Alphabet, the parent company of Google, surpassed third-quarter revenue projections, fueled by a 10% increase in digital advertising and a surge in AI-driven demand for its cloud services. This led to a 4% rise in after-hours trading for Alphabet shares, which have climbed nearly 22% over the year, aligning with broader market trends.

The tech giant also exceeded profit forecasts with earnings of $2.12 per share, compared to the market's average estimate of $1.85. CEO Sundar Pichai highlighted the benefits of AI investments, which bolstered the company's Search and Cloud business sectors. Google's robust position in the digital ad market continues to draw substantial marketing investment despite competition from social media and other advertising platforms.

Additionally, YouTube revenue surpassed $50 billion for the trailing four quarters, with a 12% rise in ad sales to $8.92 billion. Digital ad sales, making up the bulk of Alphabet's earnings, increased to $65.85 billion. Google's cloud unit experienced a 35% growth to $11.35 billion in revenue, reflecting the rise in enterprise cloud spending essential for AI technologies. Alphabet posted a 15% jump in total revenue to $88.27 billion for the period.

(With inputs from agencies.)