Google’s parent-company Alphabet has revealed the company gained a stronger-than-expected profit in the first quarter, as artificial intelligence (AI) helped improve advertising growth in its search business. Alphabet reported revenue of $90.23 billion and earnings per share of $2.81. The company’s shares rose as much as 4%, revenue growth exceeding expectations.
This report came amidst an important week for big tech, where Alphabet was among other tech giants like Meta, Apple, and Microsoft. These quarterly earnings reports are considered especially significant to investors as it showcases the state of the market during the ongoing tariff situation.
READ: Google’s AI chatbot Gemini faces accuracy concerns (December 20, 2024)
Alphabet’s search and advertising units are still showing strong growth despite the increasing competition over artificial intelligence. The company’s overall revenue grew 12% year over year, higher than the 10%, the Wall Street expected. Google’s YouTube advertising revenue came in just short of analysts’ expectations at $8.93 billion. Overall advertising brought in $66.89 billion, up 8.5% from the year prior. Google’s AI tool “AI overviews” placed on top of search results pages now has 1.5 billion users per month.
Philipp Schindler, Google’s business chief said the company is “not immune to the macro environment,” adding that President Donald Trump’s decision to end the de minimis trade loophole — allows shipments worth less than $800 to enter the U.S. duty-free–next month will “cause a slight headwind to our Ads business in 2025, primarily from APAC-based retailers.”
“I would say we have a lot of experience in managing through uncertain times, and we focus on helping our customers by providing deep insights into changing consumer behavior that is relevant to their business,” Schindler said. He also mentioned that finance, retail, health care and travel were among the top industries advertising with Google, helping revenue growth.
Last week, Google entered the final phase of the antitrust trial brought on by the Federal Trade Commission (FTC) regarding the tech giant’s dominance in digital advertising and app distribution. Despite such setbacks, Google’s revenue remains on an upward trend.