Alphabet Beats Earnings Expectations Amidst Advertising and Generative AI Concerns

As Alphabet released its earnings report on Thursday amid concerns over the expansion of its core advertising business, the tech giant managed to surpass analyst expectations. The company reported a 15% revenue growth in Q1, marking its fastest rate since early 2022, and search had broad-based growth despite growing fears around generative AI’s potential impact on online ads. Alphabet shares jumped by 12%, pushing the firm’s market cap past $2 trillion following the report. The company has been cutting costs in anticipation of slower ad revenue as competition heightens in areas such as artificial intelligence, which now counts for significant profits after years of investment. Google Cloud’s Q1 sales increased by a whopping 28% to reach $9.57 billion and operating income quadrupled to $900 million following sustained spending on AI technology. As competitors ramp up their generative AI offerings, Alphabet now faces heightened expectations for future results as it navigates the new cost reality brought about by these technologies’ increased adoption.