Alphabet Surges After Crushing Earnings -- AI Cloud Boom Takes Center Stage

This article first appeared on GuruFocus.

Alphabet (NASDAQ:GOOGL) shares rose about 5% on Thursday hits all time peak after the company reported stronger third-quarter results and highlighted growing demand for artificial intelligence tools in its cloud business.

Is GOOGL fairly valued? Test your thesis with our free DCF calculator.Alphabet Surges After Crushing Earnings -- AI Cloud Boom Takes Center Stage

The tech company reported revenue of roughly $102.4 billion for the period ended Sept. 30, coming in ahead of analyst expectations and higher than the $88.3 billion recorded a year earlier.

Profitability also improved. Adjusted earnings per share reached $2.87, topping Wall Street forecasts and last year's results.

Google Cloud remained a key growth driver. Revenue in the division increased 34% to about $15.2 billion, supported by large AI-related enterprise deals. Alphabet said the cloud unit's backlog, a measure of future contracted revenue, expanded to around $155 billion as organizations accelerate spending on data infrastructure.

Management raised full-year capital expenditure guidance to about $92 billion at the midpoint. Executives said the boost reflects heavier investment in AI data centers, noting that customer demand for computing capacity continues to exceed available supply.

The results reinforced Alphabet's positioning in the ongoing AI investment cycle, as major partners adopt the company's cloud services and Gemini models gain traction in the market.

View Comments