Google stock rose late Wednesday after parent Alphabet (GOOGL) reported third-quarter earnings and revenue that topped Wall Street targets as the core internet search advertising business delivered stronger-than-expected results.
Reported after the market close on Tuesday, Google earnings came in at $2.12 per share, up 37% from a year earlier. The internet giant reports earnings under generally accepted accounting principles, also known as GAAP.
Further, gross revenue rose 15% to $88.3 billion. Analysts polled by FactSet had predicted Google earnings of $1.84 per share on revenue of $86.4 billion.
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Internet Search Ad Growth: ‘Buy-Side Bogey’
On the stock market today, Google stock rose more than 3% to 176.28 in extended trading. Heading into the Google earnings report, shares were up 21% in 2024.
Additionally, internet search advertising came in at $49.39 billion, up 12%, topping Wall Street analyst estimates of 11.5% growth to $49.02 billion.
Ad search revenue also beat the “buy-side bogey” for Google stock, an analyst said. Mutual funds, hedge funds and institutional investors were looking for 12% to 13% ad search revenue growth, according to a Deutsche Bank report.
Further, Google’s usage of generative artificial intelligence in internet search has been closely watched. Google began widely deploying AI Overviews in the U.S. in mid May, with conversational summaries topping links for many search queries.
Cloud Computing, YouTube Results Beat
In addition, investors have been focused on operating expenses and margins as capital spending jumps amid investments in artificial intelligence. In Q2, operating margins rose to 32%, up from 28% a year earlier, topping estimates for 30.6%.
Meanwhile, Google posted YouTube ad revenue of $8.92 billion, slightly beating estimates of 12% growth to $8.88 billion.
Further, Google reported Q3 cloud computing revenue of $11.35 billion, above estimates of 29% growth to $10.88 billion.
Google Stock: Technical Ratings
Also, Q3 capital spending came in at $13.06 billion, ahead of consensus estimates of $12.66 billion.
Further, Alphabet repurchased $15.29 billion of Google stock in Q3, slightly less than the $15.68 billion in Q2.
Also, Google stock holds a Composite Rating of 91 out of a best-possible 99, according to IBD Stock Checkup. Google stock is among AI stocks to watch.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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