Today is a day with several financial reports from some of the leading companies in the technology sector, such as Google’s parent company, Alphabet. In this regard, we have learned that during this last quarter, spanning from July to September, the group has achieved noteworthy growth. However, their cloud business didn’t perform as well as expected, although they also experienced a significant increase in this area.
To begin with, Google has greatly benefited from the strong performance of digital advertising, a field well-recognized by those in Mountain View, as it has been revitalized after last year’s significant slowdown. So, albeit with a few nuances, the company’s profits have soared. Between July and September, Alphabet achieved revenues of $76.693 billion, which is 11% more than in the same period last year.
Google is growing in all areas, including the cloud, despite not meeting expectations
Additionally, the margins improved, and the net profit surged by 41% to $19.689 billion, according to the company’s own accounts published this past Tuesday. In summary, in the year-to-date, revenues have grown by 7% to $221.084 billion, and the profit has increased by 14.6%, reaching $53.108 billion, despite the costs of severance packages, such as those carried out earlier in 2023.
Continuing with the reported data from this last quarter, the company is growing in all possible areas, such as digital advertising, which increased its revenue by 9.5%, reaching $59.647 billion. It appears that both searches and YouTube ads had a strong pull during the three months corresponding to this report. However, Alphabet’s cloud business is the discordant note, even though it has also seen a notable growth of 22.5%, reaching $8.411 billion.
As we mentioned, although the results have been positive, it seems that the expectations were different for analysts in the sector. StreetAccount projected that Google Cloud would reach a figure of $8.640 billion during this last quarter. We will see what figures Google achieves in the next three months within this growing sector. On the other hand, Other Bets, Alphabet’s non-advertising business portfolio like Waymo, had about $297 million in revenue, a good growth considering it earned $208 million the previous year. In this latter field, the group continued to lose money, specifically talking about a loss of $1.190 billion.
Furthermore, it is expected that AI involvement will be much greater in the near future since the company aims to integrate it into more services following the success of OpenAI’s ChatGPT. In fact, artificial intelligence could significantly impact Google’s dominance in search and advertising if it reforms how users search for information on the internet, at least according to analysts.
“I am pleased with our financial results and the momentum of our products this quarter, with AI-driven innovations across Search, YouTube, Cloud, our Pixel devices, and much more. We continue to focus on making AI more helpful for everyone; there is exciting progress and much more to come,” said Sundar Pichai, CEO, in a statement.
To conclude, it is worth mentioning that Alphabet’s stocks have appreciated by 56% so far this year due to expectations of business improvement. Currently, they have a market capitalization of over 1.7 trillion dollars.
