June 14, 2024

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Alphabet stock rises with earnings beat and dividend announcement

Alphabet stock rises with earnings beat and dividend announcement

Earnings from Google parent Alphabet (GOOG, GOOGL) rose as much as 13% in after-hours trading on Thursday, after a breakout quarter that beat revenue and earnings estimates and excited investors by announcing a $0.20 per share dividend program.

The Board of Directors also approved a stock buyback worth up to an additional $70 billion.

“Our first-quarter results reflect strong performance from search, YouTube and cloud,” CEO Sundar Pichai said in a statement. “Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI.” innovation.”

Here are some of Alphabet's most important metrics compared to what Wall Street was expecting in the company's fiscal fourth quarter, according to data from Bloomberg:

  • Revenue, excluding traffic acquisition costs: $67.59 billion vs. $66.07 billion expected ($58.07 billion Q1 2023)

  • Adjusted EPS: $1.89 vs. $1.53 expected ($1.17 in 1Q23)

  • Cloud revenue: $9.58 billion vs. $9.37 billion expected ($7.45 billion in Q1 2023)

  • Advertising revenue: $61.66 billion vs. $60.18 billion expected ($54.55 billion in Q1 2023)

In the AI ​​space, Google is widely seen as playing catch-up with Microsoft (MSFT), which was among the first in the tech world to capture the cultural excitement around its AI-powered consumer chatbots. Microsoft has invested in OpenAI, the company behind the popular ChatGPT app.

But executives emphasized during Thursday's earnings call that the company is well-positioned to lead the shift to an AI-focused technology world, and that it is committed to investments that will foster the development of new models.

Pichai said the company has clear paths to monetize its AI breakthroughs through advertising, the cloud and subscriptions.

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Google is also working to claim additional share in the cloud market, where it currently holds third place behind rivals Amazon (AMZN) and Microsoft. The search giant's cloud revenue was up nearly 30% compared to the same period last year.

Alphabet's report arrived a day after ad rival and Big Tech peer Meta (META) provided a pessimistic outlook for the second quarter, noting that expenses for the year are growing and that it will take some time before AI investments generate significant revenue.

Hamza Shaaban is a reporter for Yahoo Finance covering markets and economics. Follow Hamza on Twitter @hshaban.

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