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Alphabet reported its 2025 first-quarter results on Thursday.
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Google CEO Sundar Pichai credited an “unique full stack approach to AI” for “strong Q1 results.”
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Revenues mostly exceeded initial estimates, except for Google Cloud, which once again fell short.
Alphabet, the parent company of Google and YouTube, reported its first-quarter earnings Thursday after market close, mostly exceeding initial revenue estimates, sending shares up 4%.
Alphabet Inc., comprised of Google and a collective of companies called Other Bets, reported its first-quarter earnings results during a conference call on Thursday.
Google CEO Sundar Pichai said in a statement that the company’s “strong Q1 results, which reflect healthy growth and momentum across the business,” reflect its “unique full stack approach to AI.”
“This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation,” said Pichai in the earnings report. “Search saw continued strong growth, boosted by the engagement we’re seeing with features like AI Overviews, which now has 1.5 billion users per month.”
Investors tuning in are also closely listening for updates about Alphabet’s cloud business, which has become a vehicle for its pursuits in artificial intelligence. Slowed Cloud business growth and a larger-than-expected capex forecast for 2025 sent Alphabet’s shares down over 8% in February.
Despite seeing 28% of year-on-year growth compared to the first quarter in 2024, Google Cloud still became the only revenue stream that fell short of initial estimates.
Alphabet unveiled its most ambitious generative AI in 2023 with Bard, which later became Gemini. Gemini’s users have grown significantly, but it still trails far behind OpenAI’s ChatGPT and Meta AI.
Meanwhile, Google is facing new competition in search, a sector it has long dominated. While EMARKETER senior analyst Evelyn Mitchell-Wolf says Google’s search business hasn’t yet fallen behind new rivals like Perplexity and China’s DeepSeek, it’s not impossible.
“As new rivals fine-tune their offerings and attract a larger share of queries, double-digit growth for Google Search is not assured,” Mitchell-Wolf said.
Investors also tuned in to hear how President Donald Trump’s tariffs are affecting the tech company. Commerce Secretary Howard Lutnick said tech products would be excluded from reciprocal tariffs but could be subject to additional tariffs in the future.
