Alphabet’s profit jumped 34 per cent in the third quarter as the parent company of search giant Google reported strong growth in its cloud business amid robust demand for computing and data services used to train and run generative artificial intelligence models.
The solid results released on Tuesday helped alleviate investors’ fears about the financial returns on the vast sums being spent on AI by Alphabet and other Big Tech peers as they seek to dominate the nascent sector. The standout unit was Google Cloud, where revenue increased 35 per cent to $11.4bn and operating profit increased sevenfold to $1.9bn from $266mn in the same period last year.
Net income was $26.3bn compared with $19.7bn in the same period a year earlier, exceeding analysts’ expectations for $22.8bn. Revenue rose 15 per cent to $88.3bn in the three months through to the end of September, beating the average estimate for $86.3bn.