Google Cloud, Google’s cloud computing business, had a hugely successful fiscal quarter, way above what analysts had predicted. This caused Alphabet, Google’s parent company, to see its stock rise more than 13% after regular trading hours.
In the first quarter of 2024, Google Cloud’s income jumped 28% to $9.57 billion. This was due to the high demand for generative AI tools that use cloud infrastructure, services, and apps. That keeps the division’s good run going. In the previous quarter (Q4 2023) it saw year-over-year growth of 25.66%.
It went from $191 million to $900 million, which is a growth of almost five times. This fact, along with Alphabet’s first-ever dividend of 20 cents per share and a $70 billion scheme to buy back shares, must have made investors happy.
In other parts of Alphabet, Google Search and other income rose 14.4% to $46.15 billion in the first fiscal quarter. It was up 20% year-over-year for YouTube to $8.09 billion, which is a little less than the $9.2 billion it made in Q4 2023. Google’s advertising business as a whole grew 13% year-over-year to $61.6 billion.
The big loser was Alphabet’s “Other Bets” group, which includes Waymo, the company’s self-driving car subsidiary. In Q1, sales went up 72% to $495 million, but Other Bets lost $1.02 billion, which is about the same amount as it lost in Q4 2023. (Other Bets doesn’t usually pay off.)
Alphabet made $80.5 billion in sales last year, 15% more than the previous year. Their net income was $23.7 billion, also 57% more than the previous year. Alphabet reported a 5% drop in workforce to 180,895 workers, which may have helped the winning quarter even more than Google Cloud’s performance.
In a call with investors, Sundar Pichai, CEO of Alphabet, said that by the end of 2024, YouTube and Google’s cloud businesses should be making more than $100 billion a year together. The businesses made a total of $64.59 billion last year, with Google Cloud making $33.08 billion and YouTube making $31.51 billion.
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“If you look back, it took Google more than 15 years to make $100 billion a year,” Pichai said. “This year’s sales have gone from $100 billion to more than $300 billion in just six years.” This shows that we have a history of putting money into and growing new businesses that do well.
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