Tue Oct 29 23:23:19 UTC 2024: ## Google’s Cloud Growth Fuels Strong Earnings, But AI Competition Looms

**Mountain View, CA -** Google parent company Alphabet exceeded analysts’ expectations for the third quarter, reporting strong revenue growth driven by its cloud business. The company’s stock surged 6% in after-hours trading following the announcement.

Alphabet reported earnings per share of $2.12 on revenue of $88.27 billion for the quarter ending September 30th, marking a 37% increase in profit and a 15% increase in sales compared to the same period last year. Analysts had anticipated earnings per share of $1.83 on revenue of $86.44 billion.

Google CEO Sundar Pichai highlighted the rapid growth of the company’s cloud division, noting that its AI portfolio is attracting new customers and leading to larger deals. Cloud revenue reached $11.4 billion, up 35% year-over-year, surpassing expectations.

This impressive performance comes as competitors Microsoft and Amazon are also aggressively expanding their cloud businesses and investing heavily in AI infrastructure. Alphabet plans to spend approximately $13 billion on capital expenditures this quarter and anticipates further investments in AI and data infrastructure in 2025.

However, Google faces a growing challenge on its own turf as competitors develop increasingly sophisticated AI-powered chatbots. Meta is reportedly developing its own search engine powered by its Meta AI chatbot, aiming to provide conversational answers to user queries.

While Pichai framed the expansion of AI search tools as beneficial for user experience, the competition for the future of search remains a key issue for Google. The company’s AI Overviews feature, which offers concise answers to user queries, now reaches 1 billion users monthly.

This earnings report comes ahead of upcoming releases from other tech giants, including Meta and Microsoft on Wednesday, followed by Amazon and Apple. Investor focus is shifting towards individual company strategies regarding AI spending and the success of their respective business lines.

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