Alphabet exceeds market expectations in the quarter

Alphabet, the technology giant behind the Google search engine and other platforms like YouTube, exceeded analysts' expectations at the start of the year, thanks to the strong performance of its various units.

The California-based company said it reported revenue of $90.234 billion in the first quarter of the year, 12% higher than the $80.539 billion reported in the same period of 2024.

Alphabet also reported earnings of $2.81 per share, up from $1.89 in the January-March 2024 period.

Net income for the period was $34.54 billion, up 46% from $23.662 billion at the start of 2024.

"We are pleased with our strong first-quarter results, which reflect solid growth and momentum across the company," said Sundar Pichai, the company's chief executive, in a statement.

"This growth is underpinned by our unique, holistic approach to AI. This quarter was incredibly exciting with the launch of Gemini 2.5, our most intelligent AI model yet, which is achieving breakthrough performance and provides an extraordinary foundation for our future innovation."

The company's results beat analysts' expectations of $1.89 per share in earnings and $89.17 billion in revenue surveyed by FactSet.

The company will pay a dividend on June 16th, equivalent to $0.21, which represents a 5% increase over the previous payment.

Alphabet shares rose 3.7% in after-hours trading on the Nasdaq.

Elsewhere, Google's advertising revenue was $66.8 billion (versus $66.4 billion expected), while its YouTube advertising revenue was lower than expected at $8.93 billion versus $8.97 billion.

The company's shares had fallen about 16% year-to-date before Thursday's call, so investors were curious to see how Google would fare in the key areas of artificial intelligence and cloud computing amid a host of legal concerns related to antitrust cases and tariff issues swirling around the world.

Investors have been closely watching whether the tech giant might be investing too much money in AI. Google and its rivals are spending billions of dollars on AI development, while the rise of China's DeepSeek raises questions about how much to spend.