Alphabet’s First-Quarter Earnings Top Wall Street Estimates

Revenues rose across the board, from YouTube ads to Google Cloud.

A woman walks by a giant screen with a logo at an event at the Paris Google Lab on the sidelines of the AI Action Summit in Paris, on Feb. 9, 2025. Thibault Camus/AP Photo

Shares of Alphabet, the parent company of Google and YouTube, surged in extended trading after the tech juggernaut beat Wall Street estimates with a big first-quarter earnings report.

In its April 24 quarterly earnings numbers, the company registered revenues of $90.23 billion, up 12 percent from a year ago and higher than the forecast of $89.18 billion.

This was driven by $66.89 billion in Google ad revenue, $12.26 billion in Cloud revenue, and $8.927 billion in YouTube ad revenue. These topped analysts’ expectations and were higher than in the January-March period of 2024.

Overall, net profits soared 46 percent year over year to $34.54 billion.

“We’re pleased with our strong first-quarter results, which reflect healthy growth and momentum across the business,” CEO Sundar Pichai said in a statement.

Pichai remarked on growth in its artificial intelligence business.

“Underpinning this growth is our unique full stack approach to AI. This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation,” he added.

Alphabet also announced a 5 percent increase to its dividend and approved an additional buyback of $70 billion worth of shares.

The stock ended the session up about 2.5 percent, finishing above $159. In after-hours trading, Alphabet shares climbed as much as 5 percent.

This year, Alphabet shares have tumbled 17 percent, joining the broader market selloff.

Legal Hurdles and AI Bets

Wall Street analysts remain bullish on the search engine giant, with the consensus forecast suggesting a more than 28 percent upside in the price over the next 12 months.

However, scores of market analysts, including Morgan Stanley, Citigroup, and Cantor Fitzgerald, have lowered their price target. The changes reflect more caution amid legal hurdles, artificial intelligence, and market volatility.

“Alphabet continues to make headlines as it deals with ongoing litigation in Washington and competition from search engines like ChatGPT, said Jay Woods, the chief global strategist at Freedom Capital Markets, in a note emailed to The Epoch Times.

“Shares have been under pressure all year and find themselves at a fork-in-the-road.”

Over the last year, the tech titan has faced multiple legal challenges.

A federal court ruled on April 17 that Google’s advertising technology unit was an illegal monopoly. The court will soon determine the remedies, which could include monetary damages or divesting the company’s publisher ad server and ad exchange products.

In August 2024, a federal judge determined Google acted illegally to keep its search engine monopoly. The company disagreed with the decision and vowed to appeal.

The Department of Justice has proposed several possible remedies, including selling off the Chrome web browser, sharing user data with rival companies, unbundling the Android operating system, and ending exclusive deals.

Google has said these ideas would “harm America” and its consumers, economy, national security, and technology.

“DOJ’s proposal would make it harder for you to get to services you prefer,” said Lee-Anne Mulholland, the vice president of regulatory affairs at Google, in an April 20 blog post.

“People use Google because they want to, not because they have to. DOJ’s proposal would force browsers and phones to default to search services like Microsoft’s Bing, making it harder for you to access Google.”

Overseas, Google agreed to pay more than $2 million to settle a years-long antitrust case in India. The Competition Commission of India alleged that the company required television manufacturers to pre-install its applications.

As for artificial intelligence, Google executives have shrugged off concerns about its competitors, including DeepSeek.

“We’re very calm and confident in our strategy, and we have all the ingredients to maintain our leadership into this year,” Demis Hassabis, Google’s AI chief, told employees in February.

The tech giant recently announced new customization tools for Gemini, the company’s flagship chatbot. The feature allows Gemini to reference users’ search histories and experiences in other Google applications.

AI chipmaker Nvidia is confident in the company’s Gemini advancements. CEO Jensen Huang recently celebrated Google’s work in the space.

“No company is better at every single layer of computing than Google and Google Cloud,” he said in a video.

Google plans to spend approximately $75 billion on AI this year.

Alphabet was the second “Magnificent Seven” company to report first-quarter earnings. Tesla Motors kicked off earnings season on April 22, registering a 71 percent decline in profits and a 9 percent drop in total revenues.