Alphabet's AI-Driven Revenue Surge: A Cloudy Success

Alphabet, Google's parent company, surpassed third-quarter revenue expectations with a significant 35% increase in its cloud business. The surge was driven by advancements in AI technology and growth in digital advertising. The company's stock has risen notably, fueled by increased political and Olympic advertising spending.

Alphabet, the parent company of Google, exceeded third-quarter revenue expectations, thanks to a robust 35% rise in its cloud business and increased digital advertising revenue. The company's shares saw a 4.4% boost in after-hours trading, marking a 22% increase this year in line with market trends.

CEO Sundar Pichai attributed the growth to strategic AI investments that are paying dividends in their Search and Cloud operations. Despite initial lagging behind competitors like Microsoft in AI, Google has been enhancing its Gemini AI chatbot and improving its AI-powered search technology.

Bob O'Donnell of TECHnalysis Research highlighted that the notable cloud revenue growth offset declines elsewhere, emphasizing the company's diversifying revenue stream. Alphabet's digital ad sales—especially those of YouTube—also saw significant increases, bolstered by political and Olympic ad spending.

(With inputs from agencies.)