In the recent earnings call, Alphabet Inc. GOOG GOOGLE announced a significant increase in capital expenditures, reflecting the company’s strong financial performance and its commitment to artificial intelligence.
What happened: CFO of Alphabet Ruth Porat revealed capital spending of $12 billion during the company’s first-quarter earnings call. This substantial investment demonstrates the company’s confidence in the potential of AI across its business.
“Our reported capex in the first quarter was $12 billion, again driven largely by investments in our technical infrastructure with the largest component for servers followed by data centers. The significant year-over-year growth in capital expenditures in recent quarters reflects our confidence in the opportunities presented by AI across our business,” Porat said.
The earnings call also highlighted the company’s financial results for the first quarter. Consolidated revenues amounted to $80.5 billion, marking a 15% increase year over year. Growth was primarily driven by the strength of search and cloud services.
Porat also highlighted the impact of restructuring and severance costs on total expenses. The company’s operating profit saw a significant increase, reaching $25.5 billion, a 46% increase from the previous year.
See also: Dogecoin, Shiba Inu and other Memecoins fuel mass adoption of Base’s L2 network, Coinbase exec says: ‘They will be one of the biggest drivers’
In the Google Services segment, revenues reached $70.4 billion, with Google Search and other advertising revenues contributing $46.2 billion. YouTube’s advertising revenue also saw a substantial increase, reaching $8.1 billion.
The Google Cloud segment reported revenues of $9.6 billion, marking an increase of 28%. The Other Wagering segment reported revenues of $495 million, with an operating loss of $1 billion.
Because matter: The first quarter earnings statement reflects Alphabet’s strong financial performance and its strategic focus on artificial intelligence. The CEO of the company, Sundar Pichaihad previously forecast combined revenue of $100 billion from its YouTube and Cloud businesses by 2024, indicating a new phase of growth for the company.
Additionally, Pichai expressed confidence in the company’s ability to manage costs associated with the new search experience, including generative responses. This indicates Alphabet’s commitment to innovation and its willingness to harness the potential of artificial intelligence.
Price action: Alphabet’s Class A shares rose 11.56% to $174.04, while Class C shares rose 11.43% in after-hours trading to $176.23, data showed by Benzinga Pro at the time of this writing
Read next: UPS earnings show weight of $170,000 settlement as it learns to weather shipping crisis
Image via Shutterstock
This content was partially produced with help from Benzinga Neuro and has been reviewed and published by Benzinga editors.