Alphabet, the parent company of Google, unveiled a stellar earnings report on Thursday evening, propelled by soaring profits and rapid progress in AI and cloud computing.
The tech titan, one of the 'Magnificent Seven', reported revenue of $90.2bn, marking a 12 per cent year-on-year increase, as reported by .
Simultaneously, net income skyrocketed by 46 per cent to $34.5bn, significantly surpassing Wall Street's predictions.
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This impressive performance sparked a more than seven per cent surge in Alphabet's stock during after-hours trading.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, declared the firm remains the 'king of search.'
"AI is powering new features and driving momentum across our business," stated CEO Sundar Pichai.
"We're excited by the early reaction to AI Mode and the continued success of AI overviews, now reaching 1.5bn users monthly."
However, despite Alphabet reaping the rewards of its investment in AI, the company faces increasing pressure due to recent tariff challenges and escalating antitrust actions.
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Pichai warned about the impact of this external environment, stating: "We're not going to speculate about the broader tariff landscape, but we expect the rollback of the de minimis exemption to be a headwind, particularly for ad spend from Asian retailers."
Advertising, which continues to be Google's primary profit driver, generated $61.7bn in the first quarter.
However, Nikhil Lai, a senior analyst at Forrester, cautioned that this robust performance might not be sustainable: "Advertisers weren't dealing with tariffs in Q1, so that performance doesn't reflect current uncertainty," he stated.
"Google's ad revenue may be pressured as consumers pull back globally."
Lee Sustar, principal analyst at Forrester, highlighted that while the company's cloud revenue saw a 28 per cent increase, "in terms of operating income, it accounts for just over seven per cent of Alphabet's total."
He also warned that any regulatory efforts to dismantle Alphabet could disrupt the cloud business, which "functions as an enabler of Alphabet's wider operations."
Meanwhile, Philipp Schindler, chief business officer, acknowledged emerging challenges. "We're seeing some pullback in brand advertising, with more spend shifting to direct response", he noted.
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Despite these pressures, the search giant remains committed to growth.
It announced a $70bn share buyback and increased its dividend by five per cent.
However, regulatory and geopolitical risks are escalating, and even the most influential players in Silicon Valley are not exempt from them.