[ad_1]
Google parent Alphabet sees strong demand for digital advertising, AI cloud services amidst stiff competition
Google parent Alphabet beat analysts’ expectations with its third-quarter earnings, including a 10 percent increase in advertising sales and a jump in cloud revenue that it attributed to a sharp rise in demand for AI services.
The company’s shares rose more than 5 percent in after-hours trading and are up just over 22 percent so far this year, in line with the broader market.
Earnings per share, at $2.12 (£1.63) beat analysts’ expectations of $1.85, as polled by LSEG, while overall revenues of $88.27bn beat expectations of $86.30bn.
Alphabet’s overall revenues grew 15 percent year-on-year, higher than the previous quarter.
AI, digital ads
Cloud revenues of $11.35bn were up nearly 35 percent from last year’s $8.41bn, which the firm attributed to demand for its AI offerings.
Alphabet and Google chief executive Sundar Pichai told analysts on a call that the firm’s “full stack” of AI products are now operating at scale and are being used by Google’s billions of users, “creating a virtuous cycle”.
Advertising revenue of $65.85bn rose from $59.65 a year ago, showing continued strength in the digital advertising market, although growth was less than the previous quarter.
YouTube advertising revenue of $8.92bn was greater than analysts had expected, with overall YouTube revenues greater than $50bn for the past four quarters, Pichai said.
Chief business officer Philipp Schindler said AI is now being used to improve YouTube recommendations.
The Gemini AI chatbot gives YouTube the ability to “recommend more relevant, fresher and personalised content to the viewer”, he said.
Other Bets, which includes life sciences unit Verily and self-driving car unit Waymo, took in revenue of $388m for the quarter, up from $297m a year earlier.
Self-driving taxis
Waymo last week closed a $5.6bn funding round to expand its self-driving taxi service, currently in Los Angeles, San Francisco and Phoenix, into additional locations.
Pichai said the Google Lens visual search tool is now used for more than 20 billion searches per month and is often used for shopping.
In August a judge found Google had an illegal monopoly in online search, a decision which could have significant effects on Alphabet’s business, including the possibility of breaking the company up into independent units.
A separate ongoing US regulatory legal action is focusing on Google’s digital advertising business.
[ad_2]
Source link
