The stock of Google's parent company Alphabet surged by as much as 7% Wednesday (July 26), adding $111 billion to its market value after its second-quarter report indicated earnings that exceeded analyst expectations.
According to Business Insider, the company saw its revenue grow 7% to $74.6 billion and its operating income rose to 12%, equivalent to $21.8 billion. While its Google Cloud business was a distant third compared to Amazon's AWS and Microsoft's Azure, its operating income turned positive at 18% year over year as a result of the revenue jump.
With the news of its market value boost, Alphabet is now worth $1.67 trillion, making it the third largest company in the US, behind Microsoft and Apple.
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Alphabet's AI Advancements
Alphabet CEO Sundar Pichai highlighted the firm's earnings call was the seventh year of them being an artificial intelligence-first company, saying Alphabet has incorporated AI capabilities into its search engine products during that time period. He added that its Bard chatbot is also getting faster and smarter.
To further its AI advantages, Alphabet said it was "sharpening" its focus and was moving its people to work on high-priority initiatives.
Internal Transitions and Business Commendations
Of all Wall Street commendations, the Bank of America has celebrated Alphabet's revenue win, arguing the fears about generative AI would negatively impact Google were unfounded.
"AI concerns [are] not visible in results," the bank added. "In our view, the quarter helped address relative revenue growth concerns vs. peers with accelerating Search and YouTube growth, and had ad results/commentary supporting our thesis that Alphabet will be a net beneficiary of AI."
Meanwhile, Alphabet also announced its long-time CFO Ruth Porat would be reassigned as the company's president and chief investment officer (CIO). Porat would remain as interim CFO "while the company searches for and selects her successor."
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