Alphabet's AI Innovations Propel Advertising Growth Amid Competitive Landscape

Alphabet's shares surged by 3% following a robust earnings report that highlighted significant growth in its AI-fueled advertising sector. Despite global trade tensions affecting U.S. ad spending, Google's revenue increased by 8.5% in Q1, boosting confidence among investors. Social media stocks also benefited from this positive performance.

Alphabet, Google's parent company, saw its shares rise by approximately 3% on Friday. The increase followed an optimistic earnings report revealing that its AI advancements are significantly contributing to its core advertising business. This alleviated some investor concerns about competition and potential tariff impacts.

Google's advertising revenue experienced a better-than-expected growth of 8.5% in the first quarter, providing relief to investors worried about the effects of declining U.S. ad spending against a backdrop of global trade tensions. Additionally, fears decelerated after reports indicated cloud computing competitors like Amazon and Microsoft reduced certain data center projects amid economic uncertainties.

Alphabet's strong growth across its major segments, coupled with a lack of panic over a general advertising slowdown, further stabilized market confidence. Following Alphabet's impressive earnings announcement and $70 billion share buyback plan, social media stocks, including Meta and Pinterest, also experienced gains.

(With inputs from agencies.)