Alphabet (NASDAQ:GOOGL) shares rose over 5% in after-hours trading on Tuesday after the company reported third-quarter results that exceeded Wall Street forecasts. The search giant saw robust growth in advertising revenue, easing fears of competition from AI-driven search alternatives.
For the quarter, Alphabet posted earnings of $2.12 per share on revenue of $88.27 billion, surpassing Wall Street expectations of $1.84 per share on $86.37 billion in revenue. This revenue beat was led by Alphabet’s core advertising business, with Search & Other revenue rising 12.2% year-over-year and YouTube Ads also gaining 12.2%, both surpassing projections.
Google Cloud continued to be a growth driver, reporting a 35% year-over-year revenue increase, about 5% above estimates, highlighting the segment’s strong reacceleration. Financially, Alphabet’s operating performance stood out, with Google Services Operating Income approximately 7% higher than expected and Google Cloud Operating Income an impressive 68% above forecasts.