In a groundbreaking move, Alphabet, the parent company of Google, announced its first-ever dividend after reporting first-quarter earnings and revenue that surpassed expectations. The tech giant saw its stock soar following the news of the dividend, a positive sign for investors.
Alphabet’s core advertising business, along with its cloud computing and YouTube units, all outperformed expectations in the first quarter. Advertising revenue rose 13% to $61.66 billion, YouTube ad revenue jumped 21% to $8.1 billion, and cloud computing revenue surged 28% to $9.574 billion. Overall, Google reported earnings of $1.89 per share, a 61% increase from the previous year, with revenue reaching $80.54 billion, a 15% increase.
Google’s announcement of a 20 cents quarterly dividend makes it a new dividend payer among tech giants like Meta Platforms. The company also revealed a new $70 billion stock buyback, further boosting shareholder confidence. Google stock spiked more than 13% in after-hours trading, with a Composite Rating of 97 out of 99.
Despite the positive news, Google did not provide any updates on its search for a new chief financial officer. The stock had already been performing well in 2024, with an 11% increase before the first quarter earnings report. However, concerns over increasing capital spending in generative AI technology caused a slight drop in the stock during Thursday’s regular session.
Alphabet’s continued innovation and growth in the technology sector has positioned it as one of the AI stocks to watch. As tech giants like Google compete in the rapidly evolving AI landscape, investors are closely monitoring Alphabet’s next moves to maintain its position as a leader in the industry.