Alphabet, Google’s parent company, announced that its investments in artificial intelligence are beginning to pay off, with cloud revenue rising 35% in the third quarter. This growth was driven by increased spending on U.S. election ads, which also contributed to higher YouTube ad sales.
Alphabet’s shares rose by 6% after the announcement, while Amazon and Microsoft, its main competitors in cloud services, saw modest increases. Alphabet exceeded expectations for both earnings and revenue in the third quarter, with search revenue up 12% and a notable increase in YouTube ad revenue.
Market analysts noted that Alphabet’s performance strengthens its position among top cloud providers, especially amid competition with Microsoft. Bob O’Donnell of TECHnalysis Research praised Google Cloud’s success in supporting company revenue amidst a relative decline in the search sector.
Alphabet’s cloud revenue reached $11.35 billion, surpassing analysts’ estimates of $10.86 billion, with earnings per share at $2.12, compared to an estimated $1.85.
Alphabet is expected to face growing pressures in the advertising market over the coming years, with its share anticipated to decline as competitors like Amazon gain ground. Meanwhile, the company continues to implement ongoing changes in its services driven by AI technology.
