Alphabet's AI Strategy Fuels Advertising Growth, Lifting Market Spirits

Alphabet's shares soared 4% post an impressive earnings report. The firm’s focus on AI has invigorated its core advertising business despite market concerns. As rivals like Amazon and Microsoft reassess their AI investments, Google's growth remains robust, buoying ad market confidence.

Alphabet, the parent company of Google, saw a 4% rise in shares on Friday following a strong earnings report that demonstrated the positive impact of its AI endeavors on its core advertising business. This comes as a relief amid fears of competition and trade-related challenges.

The first quarter saw Google's advertising revenue grow by an impressive 8.5%, alleviating investor concerns over declining U.S. ad spending due to global trade tensions. The advertising landscape was previously strained by a significant dip in spending by major advertisers on Google Search, such as Temu and Shein.

Despite regulatory and competition challenges, Alphabet's report prompted a rise in social media stocks, with notable growth in Meta Platforms and Pinterest. Alphabet's $70 billion share buyback and the success of AI Overviews bolster its market position, as experts like BofA Global Research highlight Google's advantages in data and distribution.

(With inputs from agencies.)