Alphabet surpasses expectations with strong Q1 performance and major buyback plan

Google’s parent company, Alphabet, announced a $70 billion share buyback after posting first-quarter profits that exceeded Wall Street forecasts. The company’s shares surged 4% after-hours trading, boosting its market value by around $75 billion. Alphabet reported $90.23 billion in revenue, mainly driven by steady growth in its core digital advertising business, which offset a slight slowdown in its cloud computing segment.

Despite concerns over economic uncertainty linked to US trade policies, Alphabet’s ad revenue, making up 75% of its total income, rose 8.5% to $66.89 billion, surpassing analyst expectations. CEO Sundar Pichai highlighted strong engagement in Google Search, particularly with AI-powered features, attracting 1.5 billion monthly users.

Meanwhile, Google Cloud saw a 28% revenue increase, narrowly missing projections but still reflecting solid growth. The tech giant also ramped up capital spending by 43% to $17.2 billion as part of its $75 billion annual investment plan, focusing on expanding data centres and AI infrastructure.

Despite rising costs and global competition in the AI sector, Pichai emphasised the need for heavy investment to enhance services like Search and develop AI tools. Alphabet’s positive results lifted other digital ad players, with Meta, Amazon, and Snap seeing gains in extended trading.

While Big Tech remains committed to AI spending, signs of caution emerge as some companies begin to scale back data centre expansions amid economic pressures.

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