Alphabet’s shares increased 1.7% on Friday after the company reported strong growth in its search and advertising businesses. Despite concerns over tariffs, which could impact its business in Asia-Pacific, the company showed steady growth in these areas.
Alphabet topped Wall Street estimates with a revenue of $90.23 billion, exceeding expectations of $89.12 billion. The company’s net income rose 46% to $34.54 billion, driven by growth in its search and advertising businesses.
Bank of America analyst Justin Post believes that Wall Street is underestimating the potential for Alphabet’s AI tools, such as Google’s AI Overviews tool, and cloud demand fueled by artificial intelligence. The company’s AI-powered products are showing encouraging signs of adoption, which could alleviate concerns about competition in the AI space.
Alphabet reported 12% year-over-year revenue growth and adjusted earnings per share (EPS) of $2.27, beating expectations. The company also saw a significant increase in its YouTube ad revenue, with $8.93 billion generated from the platform.
However, Alphabet’s business chief, Philipp Schindler, noted that ending the de minimis loophole could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the US duty-free, benefiting Chinese e-commerce retailers.
Despite this, Alphabet’s search and other unit revenue rose 9.8% to $50.7 billion, driven by growth in its AI-powered products and tools. The company’s AI Overviews tool has accumulated 1.5 billion monthly users from a billion in October, showing strong adoption potential.
Source: https://www.cnbc.com/2025/04/25/alphabet-stock-search-advertising-earnings.html