Boosted by quarterly results that significantly exceeded market expectations, Alphabet (GOOG, GOOGL) saw its stock price surge nearly 10% on Thursday, closing at $384.8. The company’s market value increased by approximately $421 billion in a single day, recording the second-largest single-day market cap gain in history, trailing only the roughly $440 billion increase Nvidia experienced a year ago due to policy tailwinds. So far this year, Alphabet has accumulated a gain of 23%, with its market value rising by over $860 billion to approximately $4.65 trillion, closing in on Nvidia’s (NVDA) roughly $4.85 trillion level and further narrowing the gap with the world’s most valuable company.
Earnings reports show that Alphabet’s first-quarter revenue grew 22% year-over-year to $109.9 billion. Among this, Google Search revenue rose 19% to $60.4 billion, helping to alleviate market concerns about competition from AI chatbots from companies like OpenAI and Anthropic. CEO Sundar Pichai stated that users enjoy experiences such as AI Mode and AI Overviews, and the frequency of search feature usage is also increasing. The cloud business performed even more impressively, with Google Cloud revenue surging 63% to $20 billion. The division’s backlog nearly doubled, exceeding $460 billion. Pichai noted that, driven by strong market demand for AI products and infrastructure, the cloud business accelerated its growth once again this quarter.
Alphabet’s overall operating profit grew 30% to $39.7 billion. Driven by investment gains, net income soared 81% to $62.6 billion, or $5.11 per share. Management currently expects full-year capital expenditures to reach $180 billion to $190 billion by 2026, up from the previously forecasted $175 billion to $185 billion. CFO Anat Ashkenazi stated that demand for AI computing resources has reached unprecedented levels, both internally and externally, and that AI investments are generating strong growth, as evidenced by Google Cloud’s record growth in revenue and backlog, as well as the solid performance of Google Services.
In this earnings season, Alphabet has emerged as one of the most outstanding companies among tech giants. In contrast, other major tech companies have shown clear divergence in performance: Microsoft’s stock fell 3.93%, Meta dropped 8.55% due to market concerns over increased capital expenditures, and Amazon rose only slightly by 0.77%. Analysts pointed out that the strong demand for Alphabet’s cloud and AI-related businesses validates the rationale behind its previous large-scale capital expenditures and also boosts market confidence in its AI competitiveness.
