The stock price of Alphabet surged about 16 per cent on Thursday after the parent company of Google released its quarterly earnings report and announced a cash dividend for investors.
The company reported nearly 60 per cent more profit in the quarter ended March 31 compared to the same period last year.
It beat Wall Street sales expectations for the quarter and announced its first cash dividend ever of 20 cents per share to its investors.
“Our results in the first quarter reflect strong performance from search, YouTube and cloud,” the company’s chief executive Sundar Pichai said, adding that Google’s artificial intelligence offerings came as a boon to its core business.
In after hours trading, the company’s shares surged nearly 16 per cent and its stock market value rose by about $300bn to over $2tn.
Mr Pichai said a substantial part of Google’s revenue gains could be attributed to its new AI ambitions.
“We are encouraged that we are seeing an increase in search usage among people who are using the AI overviews,” he said on Thursday.
Earlier this month, Google released a range of new AI features which it claimed would help people become more productive.
The AI tools were introduced at Google’s “Cloud Next” event and will soon be coming to Google’s Workspace suite, which includes Google Docs and Sheets as well as Gmail.
The tools, some of which are part of “Gemini in Gmail”, would enable users to simply write notes as drafts and have AI sort them into a properly written message.
“We are well underway with our Gemini era and there’s great momentum across the company,” Mr Pichai said. “Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation.”
AI is already fueling the growth of Google’s cloud computing division whose quarterly revenue surged by about 30 per cent from last year to $9.57bn.
The cloud division is also facing challenges, however, as dozens of its staff were fired after they participated in protests against the tech giant’s $1.2bn contract with the Israeli government and military.
“The corporation is attempting to quash dissent, silence its workers and reassert its power over them,” a spokesperson for the non-profit organisation No Tech for Apartheid, which organised the protest, said.
