Shares of Alphabet (GOOG, GOOGL), Google's parent company, rose more than 11% in pre-market trading on Friday, after outstanding quarterly results that beat revenue and earnings estimates and excited investors by announcing a $0.20 per share dividend program. .
The Board of Directors also approved a stock buyback worth up to an additional $70 billion.
“Our first-quarter results reflect strong performance from search, YouTube and cloud. Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave,” CEO Sundar Pichai said in a statement Thursday. To innovate artificial intelligence.
Revenue, excluding traffic acquisition costs, rose 16% from the same period last year to $67.59 billion, beating analysts' expectations of $66.07 billion, according to Bloomberg data. The company reported adjusted EPS of $1.89 versus consensus estimates of $1.53.
In the AI space, Google is widely seen as playing catch-up with Microsoft (MSFT), which was among the first in the tech world to capture the cultural excitement around its AI-powered consumer chatbots. Microsoft has invested in OpenAI, the company behind the popular ChatGPT app.
But Google executives stressed during Thursday's earnings call that the company is well-positioned to lead the shift to an AI-focused technology world, and that it is committed to investments that will foster the development of new models.
Pichai said the company has clear paths to monetize AI breakthroughs through advertising, cloud and subscriptions.
He also promoted the integration of artificial intelligence tools into Google Search, allowing users to ask more complex and descriptive questions.
But how AI will impact Google's search business is still unclear, as new AI-based interfaces may replace traditional search and change the way users interact with the web.
Investors are also concerned about the costs associated with AI versus the return. Alphabet's report arrived a day after its advertising rival and big tech peer Meta (META) signaled that expenses for the year are growing and that it will take some time before AI investments generate significant revenue. The comments helped Meta shares fall more than 10%.
Alphabet reported $12 billion in capital expenditures for the quarter, most of it related to servers and data centers. CFO Ruth Porat said during the call that future quarters will record similar levels of spending, reflecting the company's confidence in its investments in artificial intelligence.
For the second straight quarter, cloud revenue rose nearly 30% year-over-year to exceed $9 billion.
Google is working to claim additional share of the cloud market, where it currently holds third place behind rivals Amazon (AMZN) and Microsoft.
Advertising revenues, which are the heart of Google's business, rose by 13% to $61.66 billion.
Hamza Shaaban is a reporter for Yahoo Finance covering markets and economics. Follow Hamza on Twitter @hshaban.
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