SAN FRANCISCO (AP) — Google’s corporate parent on Wednesday announced its first-ever quarter with more than $100 billion in revenue, a milestone that illustrates the unwavering power of its internet empire amid legal and competitive threats.
The news of Alphabet Inc.’s accelerating growth in revenue and profit comes on the heels of a court ruling in the U.S. Justice Department’s landmark monopoly case against Google’s dominant search engine that was widely seen that wouldn’t hobble the company.
Alphabet performed like a powerhouse during the July-September period, delivering a profit of nearly $35 billion, or $2.87 per share, a 33% increase from the same time last year. Revenue rose 16% from last year to $102.3 billion. Both figures easily exceeded the analysts' projections that steer the stock market.
Investors celebrated the third-quarter numbers by driving up Alphabet’s stock price more than 6% in Wednesday’s extended trading, setting the stage for the shares to reach a new high during Thursday's regular trading session.
The gains supplement a 30% surge in Alphabet’s shares that has created nearly $770 billion in stockholder wealth since early September. That’s when U.S. District Judge to break up Google to curb the abuses of a search engine that was last year.
Mehta’s cautious handling of Google’s search monopoly largely reflected his belief that rapid advances in artificial intelligence technology have already been spawning conversational “answer engines†from rising tech stars such as ChatGPT and Perplexity that are giving consumers more options.
ChatGPT’s creator OpenAI and Perplexity have released AI-powered web browsers to compete against Google’s industry-leading Chrome browser that the Justice Department had unsuccessfully tried to persuade Mehta to order to be sold.
But Google has been implanting more AI features into both its search engine and Chrome, as well as its other products, as part of its effort to protect its turf while also expanding into new technological frontiers. In a sign of the inroads those efforts are making, Alphabet Wednesday that Google's AI-powered Gemini app now has 650 million monthly users.
“We are seeing AI drive real business results across the company,†Pichai told analysts during a Wednesday conference call in which he described Google being in “an expansionary moment.â€
Like other major tech companies, Google has been bankrolling its AI ambitions with a spending spree that has raised worries about a . Alphabet now expects to budget $91 billion to $93 billion for capital expenditures this year, , with most of the money earmarked for the massive data centers needed to power AI. Alphabet's chief financial officer, Anat Ashkenazi, told analysts to expect a significant increase in the company's capital expenditures next year and said more specifics will be provided in early 2026.
“In a world where AI-driven search volumes are steadily taking market share and reshaping Alphabet’s legacy business, this report makes it clear the company isn’t ready to give up its lead anytime soon," said analyst Thomas Monteiro.
Alphabet has the luxury of drawing upon a lucrative ad network that Google has spent a quarter century building. Google’s ad sales totaled $74.2 billion in the third quarter, a 13% increase from last year.
The AI craze has been a boon for Google’s Cloud division that oversees data centers for other companies, an endeavor that has turned into the fastest growing part of Alphabet. Google Cloud posted revenue of $15.2 billion in the past quarter, up 34% from last year.
Although Google appears to have fared relatively well in the legal attack on its search engine, it still faces a potentially damaging blow in another case brought by the Justice Department against the technology underlying its ad network.
After condemning earlier this year, U.S. District Judge Leonie Brinkema is considering ways The Justice Department is seeking a court order to force Google to sell pieces of its ad network — an issue that Brinkema isn’t expected to rule on until early next year.
