Google’s Moneymaking Machine Still Pumping Out Massive 34% Increase In Profits Despite Multiple Threats

SAN FRANCISCO – Google is still growing as the corporation navigates a pivotal move to artificial intelligence and faces regulators attempting to bring down its online empire.

Google’s corporate parent, Alphabet Inc., released its results for the July-September quarter on Tuesday, providing the most recent evidence of its profitability. Alphabet’s profit and revenue grew faster than industry analysts expected, owing largely to a moneymaking juggernaut fueled by Google’s ubiquitous search engine.

Alphabet made $26.3 billion, or $2.12 per share, in the most recent quarter, representing a 34% increase over the previous year. Revenue increased 15% from the same time the previous year to $88.27 billion.

Google’s Moneymaking Machine Still Pumping Out Massive Profits Despite Multiple Threats

The earnings would have been even higher if Google hadn’t spent so much money building up its AI arsenal in a technological arms race that involves other industry heavyweights: Microsoft, Amazon, Apple, Facebook parent Meta Platforms, and emerging star OpenAI. Google’s capital expenditures in the last quarter increased 62% over the same time last year to $13.1 billion, owing primarily to AI developments.

“Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off,” Alphabet CEO Sundar Pichai stated during a teleconference to discuss the findings.

After the statistics were released, investors appeared happy with the performance, as Alphabet’s stock price increased 4% in extended trading.

According to Investing.com analyst Thomas Monteiro, Alphabet’s performance suggests that more good news for Big Tech will follow this week, with quarterly releases from Microsoft, Meta, Amazon, and Apple due in the coming days.

However, a four-year-old antitrust action filed by the United States Department of Justice has placed doubt on Google’s future.

After reviewing the evidence provided in a high-profile trial last year, a federal court declared Google’s search engine an illegal monopoly, paving the way for a dramatic shake-up. Earlier this month, the Justice Department hinted that it would seek to break up Google as part of the fines imposed by U.S. District Judge Amit Mehta next summer.

Aside from legal action against its search engine, Google has also been forced to remove restrictions to safeguard its Play Store for Android smartphone apps. That decision came earlier this month after a jury determined that the operation was likewise an illegal monopoly. Google is also reaching the completion of another antitrust trial in Virginia centered on the technology that powers its digital ad network.

As if the regulatory headaches weren’t enough, Google is also in the process of overhauling its search engine, with a greater emphasis on highlighting results generated by artificial intelligence in response to competitive threats to alternative options based on the same potentially revolutionary technology.

Moneymaking Machine Still Pumping Out Massive Profits Despite Multiple Threats

For the time being, Google remains a juggernaut.

The digital adverts linked to the search engine remained the financial foundation. That segment’s revenue increased 12% over the previous year, reaching $49.39 billion. The cloud division is also expanding at a rapid pace, owing to increased demand for AI services. The cloud division generated $11.35 billion in revenue last quarter, a 35% rise over the previous year.

Investors continue to be concerned about Google’s regulatory issues. Although Alphabet’s stock has increased by more than 20% this year, Tuesday’s closing price of $169.68 is still significantly behind the high of nearly $192 hit in July before the search engine monopoly verdict was issued.

SOURCE | AP