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Alphabet Inc, also known as Google, reported better-than-expected first-quarter results last week with ad revenues of $58.07 billion, beating analysts' estimates of $56.98 billion. Total revenue came in at $69.8 billion, up 2.6% year-on-year.
The company's core search advertising business performed well despite increasing competition from Microsoft and OpenAI. YouTube also did better than expected. The cloud hosting unit grew by 28% and turned a profit for the first time, making $191 million.
Google combined its two AI research groups into a unit called Google DeepMind, a move it said would significantly accelerate research. They plan to add conversational AI features to its flagship search engine, following a similar move by rival Microsoft.
Sundar Pichai has done a stellar job on cost-cutting, allowing the business to maintain its high profit margins even as advertisers trim their budgets. They also disclosed plans to buy back as much as $70 billion of stock, and its shares rose 5.9% on the good news.
Google remains one of our anchor Vestact portfolio positions. They've stepped up to the competition and soldiered ahead. The share price has good upside potential.
