{"id":843655,"date":"2025-04-26T09:11:48","date_gmt":"2025-04-26T14:11:48","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/04\/26\/google-cloud-ai-ads-waymo-and-more-google-earnings-takeaways\/"},"modified":"2025-04-26T09:11:48","modified_gmt":"2025-04-26T14:11:48","slug":"google-cloud-ai-ads-waymo-and-more-google-earnings-takeaways","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/04\/26\/google-cloud-ai-ads-waymo-and-more-google-earnings-takeaways\/","title":{"rendered":"Google Cloud, AI, ads, Waymo, and more: Google earnings takeaways"},"content":{"rendered":"
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In This Story<\/h6>\n<\/section>\n

Google\u2019s parent company, Alphabet (GOOGL<\/a><\/span>), was a big winner on Wall Street this week, delivering first-quarter earnings<\/a><\/span> that largely surpassed expectations \u2014 and highlighted momentum across its search, cloud, and AI businesses. The report sent investors a strong signal that the company is weathering macroeconomic headwinds with diversified growth and continued strength in its core businesses.<\/p>\n

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Fueled by growth in cloud services and AI, Alphabet posted a net income of $34.5 billion on $90.2 billion in revenue \u2014 a 12% year-over-year increase that beat Wall Street\u2019s estimate of $89.2 billion. The company also reported earnings per share of $2.81; analysts were expecting that number to be $2.01. Net income increased 46%.<\/p>\n

The company also announced a $70 billion stock-buyback program and said it will increase its quarterly cash dividend by 5% to $0.21.<\/p>\n

The stock popped in after-hours trading and continued to rise Friday \u2014 1.6% around midday \u2014 buoyed by better than-expected revenue, margin expansion, and bullish sentiment from analysts who noted broad-based strength and Google\u2019s early success in monetizing its AI tools.<\/p>\n

\u201cWe are so back,\u201d Wedbush analysts said about Alphabet\u2019s earnings.<\/p>\n

<\/a>Search, ads, and AI all in sync<\/h2>\n

Google Search continues to be Alphabet\u2019s revenue anchor. It\u2019s the company\u2019s largest ad segment, and its revenue grew almost 10% year over year to $50.7 billion, slightly ahead of the Street\u2019s estimates.<\/p>\n

Part of that engagement is being driven by Google\u2019s generative AI Overviews tool, which is bolted atop the company\u2019s search results, making it virtually unavoidable. CEO Sundar Pichai said AI Overviews \u201cnow has 1.5 billion users per month\u201d and expanded in the first quarter to more than 15 languages across 140 countries. The company also launched \u201cAI mode\u201d in March for more complex queries, which Google said has received positive user feedback.<\/p>\n

According to William Blair analysts, Alphabet is in a \u201cgood, positive cycle for search with AI,\u201d with strong engagement trends and growing traction from new tools.<\/p>\n

While investors had been wary about whether AI-driven search results would be less profitable than traditional search results, chief business officer Philipp Schindler said on the earnings call that the company is monetizing AI Overviews \u201cat approximately the same rate.\u201d<\/p>\n

Schindler also said that AI is helping Google\u2019s ad business better match ads to searches \u2014 letting marketers \u201creach customers and searches where we would not previously have shown their ads.\u201d The company\u2019s ad revenue was $66.8 billion (versus an expected $66.4 billion).<\/p>\n

William Blair noted that \u201cthis quarter is the largest expansion for AI overviews, with new users and more responses,\u201d and said advertisers using demand-generation tools \u2014 a key driver of AI-powered ad personalization \u2014 are seeing a 26% year-over-year boost in conversions.<\/p>\n

Wedbush analysts were similarly upbeat, noting that \u201cadvertising trends were healthy to start the year.\u201d They pointed out that first-quarter Google Search revenue growth exceeded consensus by roughly 40 basis points and that the company didn\u2019t call out any signs of softening ad backdrop, \u201clikely tempering some investor concern in the near-term.\u201d<\/p>\n

Morningstar analysts said they were particularly impressed with the \u201cwide range of monetization angles the firm is creating by leveraging AI, including Google Cloud, Gemini, AI Overviews, and improved ad targeting tools provided to advertisers.\u201d<\/p>\n

On the earnings call, Pichai highlighted the company\u2019s recently released Gemini 2.5 AI model, which he called \u201can extraordinary foundation for our future innovation\u201d in the report. The updated model, integrated across Google products and Google Cloud, is powering features such as AI Overviews and advanced developer tools. While Gemini\u2019s user count has grown substantially, it still lags behind OpenAI\u2019s ChatGPT and Meta AI (META<\/a><\/span>).<\/p>\n

<\/a>Cloud keeps growing<\/h2>\n

Google Cloud remained one of the fastest-growing \u2014 and most important \u2014 segments in Alphabet\u2019s portfolio. <\/p>\n

Google Cloud now holds the third-largest market share in the global cloud infrastructure space, behind Amazon Web Services (AMZN<\/a><\/span>) and Microsoft Azure (MSFT<\/a><\/span>). But Google\u2019s cloud services growth seems to be outpacing the rest of the sector.<\/p>\n

Revenue reached $12.3 billion, up 28% year over year, just about matching analysts\u2019 expectations. The segment\u2019s profitability improved significantly, and operating income was up 142%. Those numbers were driven by strong growth across both core and AI-specific products.<\/p>\n

The company said demand continues to outpace capacity, reinforcing the need for continuing infrastructure investment. Alongside Thursday\u2019s earnings, the company reiterated plans to invest approximately $75 billion in capital expenditures in 2025, much of that dedicated to AI infrastructure and data centers to support workloads.<\/p>\n

Wedbush called Cloud\u2019s revenue growth \u201cencouraging\u201d and noted that \u201cthe more aggressive pace of investment should alleviate capacity constraints as AI demand continues to scale.\u201d<\/p>\n

<\/a>Waymo is still ramping up<\/h2>\n

Alphabet\u2019s autonomous driving company, Waymo, also had a big quarter. The company said it\u2019s providing 250,000 paid robotaxi rides a week \u2014 five times what it did a year ago \u2014 and has expanded operations across San Francisco, Phoenix, Los Angeles, and Austin. Further launches in Atlanta, Miami, and Washington, D.C. are planned.<\/p>\n

At the moment, Waymo remains a small contributor to Alphabet\u2019s bottom line, but it\u2019s drawing increased investor interest.<\/p>\n

\u201cThis is probably the first question I\u2019ve got on an earnings call on Waymo,\u201d Pichai joked in a Q&A session after the quarterly earnings report was released. \u201cIt\u2019s a sign of progress.\u201d<\/p>\n

He then suggested that Waymo\u2019s self-driving robotaxis might be available for purchase \u2014 but didn\u2019t offer a timeline or any detail beyond saying \u201cthere is future optionality for personal ownership.\u201d<\/p>\n

<\/a>Headwinds ahead<\/h2>\n

Despite the strong quarter, Google faces big regulatory risks, which the company didn\u2019t comment on during its earnings call.<\/p>\n

Two antitrust cases \u2014 that have both already been decided in the government\u2019s favor \u2014 are entering the remedy phase of their trials, with potential outcomes ranging from enforced data sharing to a company breakup. <\/p>\n

The search engine giant was back in court this week<\/a><\/span>, related to a ruling that found the company has an illegal monopoly in online search \u2014 in part by paying web browsers and smartphone manufacturers to feature its search engine. And the DOJ told the judge it had an eyebrow-raising solution: forcing the company to sell its popular Chrome browser<\/a><\/span>.<\/p>\n

In a separate antitrust case, a federal judge ruled that the company had illegally maintained a monopoly<\/a><\/span> in some of its online advertising technology, which could result in regulatory fines or structural changes to how Google\u2019s ad business operates \u2014 and maybe even a break-up. <\/p>\n

And Japan\u2019s FTC recently sent the company a cease-and-desist order<\/a><\/span> after it said Google\u2019s search practices were monopolistic.<\/p>\n

Alphabet also acknowledged that changes to the U.S.\u2019 \u201cde minimis\u201d trade exemption could pressure the company\u2019s ads business, primarily among Asia Pacific-based retailers such as Temu and Shein.<\/p>\n

Google executives said it\u2019s still too soon to determine the full effects of the current macroeconomic volatility \u2014 but said there could definitely be signs of weakness in an area of spending that had been robust until recently.<\/p>\n

\u201cI mean, we\u2019re obviously not immune to the macro environment, but we wouldn\u2019t want to speculate about potential impacts beyond noting that the changes to the de minimis exemption will obviously cause slight headwind to our ads business in 2025, primarily from APAC-based retailers,\u201d chief business officer Schindler said on the earnings call. <\/p>\n

He added that Google is well-versed in navigating periods of uncertainty. <\/p>\n

Alphabet has traditionally chosen not to provide specific forecasts for revenue or earnings. When chief financial officer Anat Ashkenazi made a presentation three months ago, she didn\u2019t mention the looming trade war or macroeconomic uncertainty \u2014 she didn\u2019t mention them on Thursday\u2019s call, either.<\/p>\n

<\/a>Investors\u2019 takes<\/h2>\n

Wedbush moved its consolidated estimates higher \u2014 second-quarter revenue of $91.9 billion (up 8.5% year over year) and 2025 operating income of $123.2 billion, up 4% from the firm\u2019s prior forecasts. Its 2025 revenue estimate now stands at $383.1 billion, up 9.5% year over year and up 2% from its previous estimate.<\/p>\n

\u201cWhile we remain cautious across the group, we are incrementally constructive on the potential outcomes for this year,\u201d analysts wrote. They also said they see \u201ca case for multiple expansion in the coming quarters.\u201d<\/p>\n<\/div>\n

Read More<\/a>
\n Shannon Carroll<\/p>\n","protected":false},"excerpt":{"rendered":"

In This Story Google\u2019s parent company, Alphabet ( GOOGL ), was a big winner on Wall Street this week, delivering first-quarter earnings that largely surpassed expectations \u2014 and highlighted momentum across its search, cloud, and AI businesses. The report sent investors a strong signal that the company is weathering macroeconomic headwinds with diversified growth and<\/p>\n","protected":false},"author":1,"featured_media":843656,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4441,496],"tags":[],"class_list":{"0":"post-843655","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-cloud","8":"category-google"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/843655","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=843655"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/843655\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/843656"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=843655"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=843655"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=843655"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}