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Alphabet stock surges on earnings beat, dividend announcement

In Business
April 25, 2024

Google parent Alphabet (GOOG, GOOGL) gained as much as 13% in after-hours trading Thursday, following a stand-out quarter that beat revenue and earnings estimates and stoked investor excitement with the announcement of a cash dividend program of $0.20 per share.

The board of directors also approved stock repurchases up to an additional $70 billion.

“Our results in the first quarter reflect strong performance from Search, YouTube and Cloud,” said CEO Sundar Pichai 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 significant 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 in Q1 2023)

  • Adjusted earnings per share: $1.89 vs. $1.53 expected ($1.17 in Q1 2023)

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

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

In artificial intelligence, Google has widely been seen as playing catch up to Microsoft (MSFT), which was among the first in the tech world to reap the cultural excitement around consumer AI chatbots. Microsoft invested in OpenAI, the company behind the popular ChatGPT.

Google has also been working to claim additional share of the cloud market, where it currently sits in third place behind rivals Amazon (AMZN) and Microsoft. The search giant’s cloud revenue increased nearly 30% compared to the same period last year.

Alphabet’s report arrived a day after its advertising rival and Big Tech peer Meta (META) offered a downbeat Q2 forecast and noted that expenses for the year are growing and that it will take some time before AI investments generate significant revenue.

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on Twitter @hshaban.

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