Google reported better-than-expected second-quarter results on promoting and cloud hype, evidence that the bogus intelligence (AI) search it introduced in May didn’t have a negative impact.
Alphabet, Google’s parent company, announced its second quarter earnings on the twenty third (local time), with sales of $84.74 billion (roughly KRW 117.4 trillion) and net profit of $23.6 billion (roughly KRW 32.7 trillion). Sales increased 14% and net profit increased 28.6% in comparison with the identical period last yr.
This figure exceeds each the market expectations of $84.19 billion in sales and $22.9 billion in net income. Specifically, promoting revenue increased 11% to $64.6 billion, and cloud computing increased 28.8% to $10.35 billion.
Nonetheless, the expansion rate slowed barely in comparison with the previous quarter. YouTube promoting growth slowed from 21% in Q1 to 13%, and search promoting revenue growth also stagnated at 13.8%.
“This achievement demonstrates our tremendous continued momentum in search and our significant progress in cloud,” said CEO Sundar Pichai. “Our AI initiatives are driving recent growth.”
However, Jefferies analyst Brent Thrill said, “The outcomes weren’t as compelling as the primary quarter, when sales growth was more robust,” adding, “There’s nothing exciting about it.”
Google was the primary of the so-called “Magnificent Seven” to report its earnings for the last quarter, and the market is watching to see how its massive spending on generative AI is resulting in increased revenue.
Specifically, capital expenditures increased again to $13 billion (about 18 trillion won), $1 billion greater than the previous quarter and almost double the $6.9 billion in the identical period last yr. This shows that investment in data centers, chips for training and running AI models, and ‘Gemini’ are steadily increasing.
“We’re within the early stages of a really transformative space,” Pichai said. “While you undergo a transition like this in technology, the danger of underinvesting is way higher than the danger of overinvesting. There’s a much larger downside to not investing to be ahead of the curve.”
He also claimed that Google’s generative AI services are already generating billions of dollars in recent revenue and are getting used by 2 million developers.
Google’s stock has risen by nearly a 3rd this yr, giving it a market capitalization of $2.26 trillion, making it the world’s fourth-most useful publicly traded company behind Apple, Microsoft and Nvidia.
Specifically, the AI search function that was launched in May had a difficult start because of initial hallucinations and incorrect source citations, but it surely is claimed to be quickly stabilizing.
Meanwhile, the autonomous driving subsidiary Waymo drew attention on this performance. Waymo’s sales increased by 28% to $365 million.
Google announced it might invest an extra $5 billion in Waymo.
Reporter Im Dae-jun ydj@aitimes.com
