Alphabet, Google's parent company, reported strong results in the second quarter (April to June) this year, thanks to growth in its cloud business.
Alphabet announced on the 23rd (local time) that its revenue for the second quarter was $96.43 billion, a 14% increase compared to the same period last year. Net profit was $2.31 per share, marking a 20% increase to $28.2 billion during the same period.
This figure surpassed Wall Street's average expectations of $94 billion in revenue and a net profit estimate of $2.18 per share.
Sundar Pichai, Google's Chief Executive Officer (CEO), noted that the key institutional sectors, including artificial intelligence (AI), search, YouTube, and cloud, experienced balanced growth. Pichai said, "AI is having a positive impact across the business and driving strong momentum," adding, "The search sector recorded double-digit revenue growth, and new features like AI Overview are also performing well."
Despite the rise of AI search, Google's search and advertising business showed solid growth. Google's search sector revenue for the second quarter reached $54.19 billion, while advertising revenue increased to $71.34 billion, about a 10% increase compared to the same period last year. Google Cloud's revenue exceeded market expectations at $13.62 billion, an increase of 31% from the previous year. YouTube advertising also surpassed expectations at $9.79 billion, exceeding the forecast of $9.56 billion.
Revenue from other businesses, including Waymo, the autonomous vehicle sector, and Verily, the life sciences sector, was $373 million, up from $365 million a year earlier. However, losses increased to $1.25 billion, compared to $1.13 billion during the same period last year.
Pichai CEO added that the AI search feature 'AI Overview,' which summarizes search results, has now surpassed 2 billion monthly users in over 200 countries and regions. This is an increase from 1.5 billion users in the previous quarter. He also mentioned that the monthly active users of the Gemini app, equipped with AI chatbot functionality, have exceeded 450 million.
Additionally, Google announced plans to expand its investment in artificial intelligence (AI) related facilities by $10 billion from its original plan this year. In February, Google had set its capital expenditure for AI infrastructure, among other things, at $75 billion this year, but has now revised it upward to $85 billion. Google cited the increase in "data center and cloud demand" as the reason for the increased investment.
Pichai CEO then said, "I am looking forward to the partnership with OpenAI." Last week, OpenAI announced that it would be using Google as the cloud infrastructure for its ChatGPT.