Alphabet stock rises nearly 6% on strong Q3 earnings boost

Alphabet Inc. (GOOG), the parent company of Google, experienced a 5.9% increase in after-hours trading after surpassing Wall Street expectations with its third-quarter financial results. 

The stock closed at $171.14 on October 29, rising further to $181.22 in after-hours trading, according to Yahoo Finance. 

Year-to-date, Alphabet’s stock has increased by 21.73%. 

The company reported quarterly revenue of $88.27 billion, marking a 15% growth compared to the same period last year and exceeding market estimates by 2.2%. 

Earnings per share (EPS) rose 35% year-over-year to $2.12, outperforming analysts' expectations of $1.85 by 13.6%. 

CEO Sundar Pichai attributed the company’s performance to its ongoing investment in artificial intelligence (AI), stating, “The long-term focus and investment in AI are paying off and driving success for the company and for our customers.” 

Alphabet saw a 35% increase in Google Cloud revenue, which reached $11.4 billion, reflecting growth in AI-related products and services. 

The announcement precedes the earnings reports of other major tech companies like Meta, Microsoft, Amazon, and Apple later this week. 

This group of firms, often referred to as MAMAA stocks, has seen increased activity in 2023 due to investments in AI and strategic collaborations. 

In August, Alphabet introduced its latest AI model, Gemini 1.5 Pro, which performed well in industry benchmark tests. 

Pichai also noted that over 25% of new code at Google is generated by AI, boosting productivity across the company. 

The Google Ads segment remained Alphabet’s primary revenue source, generating $65.86 billion in Q3, up 10.4% year-over-year. 

Revenue from Google Search reached $49.39 billion, reflecting a 10.9% increase from the same quarter in 2023.