Alphabet Revenue Jumps 15% to $88.3 Billion

Google’s parent company reported a 15% jump in year-over-year revenue, driven by strong results in its cloud-computing division and boosting the company’s fortunes during a costly push into artificial intelligence.

The Wall Street Journal reports the parent company, Alphabet recorded total revenue of $88.3 billion in the third quarter, which grew at a faster rate than the second quarter’s 14%.

Alphabet plans to build on existing cost-cutting efforts around using AI to streamline workflow and manage headcount and the company’s physical footprint, Ashkenazi said.

“I plan to build on these efforts but also evaluate where we might be able to accelerate work and where we might need to pivot to free up capital for more attractive opportunities,” said Ashkenazi, who joined the company in June after 23 years at drugmaker Eli Lilly.

CNBC reports Google advertising revenue of $65.85 billion. That was up from $59.65 billion a year ago, showing that Google’s advertising business continues to grow, though at a slower pace than in the second quarter.

YouTube ad revenue just beat analysts’ expectations, showing better growth than last quarter. The Google-owned company faces increased pressure from other advertiser options such as Netflix, TikTok and Amazon.

AI is improving YouTube recommendations, Chief Business Officer Philipp Schindler said on the call with investors. The company’s AI language model Gemini has given YouTube the ability to “recommend more relevant, fresher and personalized content to the viewer.”

CNBC also reports Google Workspace, the company’s collection of cloud computing and productivity suite, saw strong growth during the third quarter, Ashkenazi said. Google Cloud Platform, the company’s data management and AI suite, saw growth that outpaced the cloud unit’s growth during the quarter, Ashkenazi added.

The results kicked off a busy week of tech earnings, with Microsoft, Apple, Amazon.com and Meta Platforms all reporting results. Investors will be looking closely for signs of whether AI spending is starting to benefit companies’ bottom lines. Google hasn’t broken out exactly how much revenue it has made from AI services.

Google and other tech giants have significantly stepped up AI spending over the past few years as part of the broader AI boom. Most of that money has gone to build new data centers to develop and run AI models.