- Alphabet’s (GOOG, GOOGL) stock rose nearly 5% to $167.17 in after hours trading after reporting Q1 earnings of $2.81 per share on $90.2 billion in revenue, surpassing estimates of $2.01 per share and $89.1 billion.
- Google’s advertising revenue reached $66.8 billion, beating expectations of $66.4 billion, while Cloud revenue hit $12.2 billion, slightly below the $12.3 billion forecast, with a 5% dividend increase and $70 billion buyback announced.
- Despite tariff-driven recession fears and recent antitrust losses in advertising and search, Alphabet’s strong Q1 results highlight resilience, though analysts warn of potential digital ad weakness in Q2.
Alphabet Inc.’s (GOOG, GOOGL) stock surged nearly 5% to $167.17 in after hours trading on Thursday, buoyed by a robust first-quarter earnings report that surpassed analyst expectations, despite looming economic and regulatory challenges. The company delivered earnings per share of $2.81 on revenue of $90.2 billion, exceeding consensus estimates of $2.01 per share and $89.1 billion, a significant improvement over last year’s $1.89 per share and $80.5 billion. Alphabet also announced a 5% dividend increase and authorized an additional $70 billion for stock buybacks, signaling confidence in its financial resilience. Google’s advertising revenue reached $66.8 billion, topping forecasts of $66.4 billion, while Google Cloud Platform generated $12.2 billion, slightly below the expected $12.3 billion but up from $9.5 billion in Q1 2024.
The earnings beat comes amid heightened market volatility following President Trump’s “Liberation Day” tariff plan, which has sparked recession fears and raised concerns about weaker digital advertising in the second quarter, as noted by Barclays analyst Ross Sandler on April 8. Sandler pointed to a recent slowdown in e-commerce transaction velocity, suggesting potential headwinds for Alphabet’s ad-driven revenue model. Additionally, Alphabet faces significant regulatory pressures after two antitrust rulings. A U.S. federal judge recently determined that Google holds an illegal monopoly in the online advertising market, potentially forcing a restructuring or divestiture of its ad business, following a prior ruling less than a year ago that its search and ad operations violated antitrust laws.
Despite these challenges, Alphabet’s strong Q1 performance underscores its ability to navigate a complex landscape, leveraging its dominance in search and advertising while expanding its cloud offerings. The dividend hike and buyback program reflect a strategic focus on shareholder value, even as the company contends with macroeconomic uncertainties and legal battles. As one of the first Big Tech firms to report post-tariff turmoil, Alphabet’s results provide a critical benchmark for the sector, highlighting both its operational strength and the risks posed by external pressures.
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