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Alphabet, leveraging digital advertising and artificial intelligence, shatters expectations with above-expected quarterly profits and sales and also decides to pay the first dividend in its history, 20 cents per share which will be paid to shareholders in June. For a good measure of optimism, alongside the unprecedented coupon it also triggers a new 70 billion share buyback plan, which equals the one launched last year.
Google’s stock is turbocharged
The positive surprise in the accounts reported by Google’s parent company and the rewards for shareholders turbocharged the stock, which gained 11 percent after the market. The jump was even more significant because shares have risen by around 13% since the beginning of the year, a modest performance so far among the hi-tech giants.
Turnover +15%, profits +57%
Revenue in the first quarter of 2024 rose 15% to 80.5 billion, an acceleration compared to 13.5% in the period October-December 2023, thanks to continued leadership in digital advertising and the boom in technology services for the artificial intelligence, such as the cloud. Advertising revenue, to be precise, totaled 61.7 billion, up 13 percent. The subsidiary YouTube raked in revenue of 8.1 billion in videos, rising by 21 percent. The cloud division recorded an increase of 29% to 9.6 billion. Profits soared as much as 57% to $23.7 billion, helped by cost-cutting efforts including layoffs.
The bet on Ai
Chief executive Sundar Pichai described the increases as encouraging in the use of the company’s search engine from users who have increasingly experimented with the Ai options offered by Google, although he avoided giving more details. Rival Meta has also returned from record results driven by artificial intelligence. However, you have suffered on the stock market due to the huge expenses you are incurring on this frontier. The figures on Alphabet’s performance, however, also seemed to limit nervousness in the face of huge investments, although reported by the group.
Investments growing by 91%
Huge, or rather, perhaps saying little. Alphabet’s capital expenditures rose 91% in the quarter from a year ago to $12 billion. Chief Financial Officer Ruth Porat also added that they are expected to remain around similar levels if not higher in the future.