Alphabet, the parent company of Google, reported stronger-than-expected sales for the third quarter, driven by its cloud computing business. Revenue, excluding payments to partners, rose to $74.6 billion, surpassing the average analyst estimate of $72.9 billion. Earnings per share came in at $2.12, beating the predicted $1.84.
As Google's core search business matures, the company is betting on growth in its cloud division, which offers computing power, software, and services to other companies. Google is leveraging its expertise in artificial intelligence (AI) to attract more cloud customers, challenging larger competitors like Amazon and Microsoft.
Alphabet CEO Sundar Pichai highlighted that their AI solutions are helping existing clients maximize product use, attract new customers, and secure larger deals in the cloud sector. Following the earnings announcement, Alphabet's stock rose over 4% in after-hours trading and has gained 21% this year.
The cloud division's sales surged to $11.4 billion, outpacing analyst expectations of $10.8 billion. Research analyst Ido Caspi from Global X ETFs noted that Google ranks third in the market behind Amazon and Microsoft, but all three players have room for growth as businesses invest in AI.
