Alphabet Surpasses Expectations with Strong Cloud Growth and Rising Profitability

emirates7 -
Alphabet kicked off a big week of earnings for US tech stocks with a bang, delivering solid growth on the top and bottom line, while its cloud business saw 35% growth for the quarter.
According to Josh Gilbert, Alphabet's cloud division was the standout, seeing revenue rise to USD$11.4 billion, higher than the USD$10.8 billion Wall Street expected. Microsoft and Amazon are the leaders in the cloud business, but Google is gaining ground and attracting more cloud customers as the rise of AI across enterprises continues.
Importantly, profitability rose at a solid pace, with operating margins jumping from 32% to 28% a year ago despite rising capital expenditures. The company spent USD$13.1 billion in the quarter, more than expected, but with net income rising 33% year over year, investors can know that their spending is well placed.
It's hard to pick a fault in this report. Every key segment has beat expectations, which shows precisely why the company is branded as magnificent. Alphabet is a money-making machine, and its growth is nothing short of impressive. Solid earnings from the rest of the Magnificent Seven, like these results today from Alphabet, will put these stocks on track to keep driving higher into the end of the year.