Alphabet shares surge 6% afterhours on first $100 billion revenue quarter, earnings beat

Alphabet Inc., parent company of Google, saw its stock price surge over 6% in extended trading on Wednesday, in response to its third quarter results reported after the close of regular trading.

The company reported revenue of $102.35 billion during the quarter, the first time that it crossed the milestone. The figure was also higher than the $99.89 billion expected by analysts. Its Earnings Per Share (EPS) at $3.1 was also higher than the $2.33 projection.

Among its various business divisions, revenue from YouTube and Google Cloud also surpassed expectations from Wall Street analysts. Similar to Meta, the company also announced an increase in its capex for the full financial year.

For the current financial year, Alphabet expects capex to be in the $91 billion to $93 billion range, higher than the $75 billion to $85 billion projected earlier.

“We continue to drive strong growth in new businesses. Google Cloud accelerated, ending the quarter with $155 billion in backlog,” CEO Sundar Pichai said in the earnings release.

Strong demand for AI-related products continues to boost Alphabet's cloud business, whose revenue increased by 35% from last year to $15.15 billion. “We have signed more deals over one billion dollars through Q3 this year than we did in the previous two years combined,” said Pichai, referring to the first nine months of the year. In August, Google won a $10 billion cloud contract from Meta spanning six years.

Google's flagship AI app Gemini now has more than 650 million monthly active users, higher than the 450 million in the previous quarter. OpenAI said earlier this month that ChatGPT has more than 800 million users per week.

Alphabet's other businesses, including the life sciences unit and self-driving car unit Waymo, reported losses of $1.42 billion from $1.12 billion earlier.

Shares of Alphabet are up 6.3% in extended trading to $292.41. The stock had ended 2.5% higher in regular trading as well, taking its year-to-date advance to 45%.