SAN FRANCISCO (AP) — Google’s latest quarterly report provided further evidence that its internet empire is withstanding an artificial intelligence shakeup that’s turning into another potential boon for the company.
The numbers released Wednesday marked Google's third consecutive quarter of digital ad growth of more than 10% from the previous year, while also posting more than 30% sales growth in its division that powers data centers for AI services.
Those increases during the October-December period propelled Google’s corporate parent Alphabet Inc. well past the earnings forecasts of stock market analysts.
Alphabet’s fourth-quarter profit rose 30% from the prior year to $34.5 billion, or $2.82 per share, while revenue climbed 18% to $113.8 billion.
The collective momentum of Google’s main business in search and advertising and the still-nascent AI field indicates a company born during the late 1990s internet boom is becoming even stronger during another technology phenomenon nearly 30 years later.
“Search saw more usage than ever before, with AI continuing to drive an expansionary moment," Alphabet CEO Sundar Pichai said.
Google’s successful evolution has helped drive up Alphabet’s stock price nearly 60% in the past five months, giving it a $4 trillion market value. That may have raised the bar for Alphabet to impress investors as the company's shares dipped 1% in extended trading following the report.
Apple, also currently worth $4 trillion, thinks so highly of Google’s AI that the iPhone maker recently struck a deal to use Google’s Gemini technology in a long-delayed upgrade to its virtual assistant, Siri.
Google is also embedding more of its Gemini AI into its long-dominant search engine, Gmail and Chrome browser as it tries to avoid complacency and being outmaneuvered by up-and-coming companies such as OpenAI, Anthropic and Perplexity.
To meet the challenge, Alphabet has been on a spending spree to expand its AI capacity. After pouring $91 billion into capital expenditures devoted mostly to AI last year, the Mountain View, California company is expected to spend even more this year. Its capital expenditure budget has ballooned from about $30 billion annually since 2022 when OpenAI released its ChatGPT chatbot to much acclaim, prompting Google to pull out all the stops to catch up.
Google's thriving digital ad business is helping finance the spree. Its digital ad sales totaled $82.3 billion in the fourth quarter, up 14% from the previous year. Google Cloud, which oversees the data centers behind many AI services, posted revenue of $17.7 billion, a 48% increase.
Search saw more usage
than ever before, with AI continuing to drive an expansionary moment
