More

    Alphabet Reports 35% Surge in Google Cloud Revenue, Signaling Strong Prospects for Microsoft and Amazon

    Google-parent Alphabet’s strong cloud sales for the July-September quarter indicate positive trends for major cloud providers like Microsoft and Amazon.com, highlighting a growing market for AI-enhanced computing power.

    Alphabet’s stock jumped 5.5% in premarket trading following a 35% surge in Google Cloud revenue, marking the fastest growth in eight quarters. Analysts had projected a 29% increase. Alongside cloud growth, the company’s core advertising revenue rose by 10%.

    Angelo Zino, a senior equity analyst at CFRA Research, noted that when Microsoft and Amazon report their results this week, Google is likely to show the most impressive cloud growth numbers. Although Google Cloud remains smaller than its competitors, it represented 13% of Alphabet’s total third-quarter sales, up from 11% a year earlier.

    For context, Amazon’s AWS made up 18% of its revenue in the previous quarter, while Microsoft’s Intelligent Cloud unit, which includes Azure, contributed 44% to its overall revenue. Analysts attribute Google Cloud’s continued growth to its AI capabilities, which have become a key factor for organizations selecting Google as their cloud provider.

    This quarter marks the fourth consecutive period of growth acceleration for Google Cloud, which had previously experienced a slowdown attributed to “customer optimization efforts.” Despite having less AI capacity than competitors, Google has differentiated itself through its proprietary Tensor Processing Units and enhanced security features, attracting more customers.

    Alphabet has significantly invested in AI, aiming to improve its Search business and cloud services. This includes plans for substantial capital expenditures in 2025 to expand its data centers globally. The integration of the generative AI chatbot Gemini into Google Cloud has introduced features like AI-driven code generation and advanced cybersecurity threat intelligence, driving increased customer spending on AI services.

    According to analysts, Google Cloud’s performance has surpassed expectations, demonstrating meaningful acceleration and margin expansion as the company effectively leverages its AI capabilities to drive revenue growth.

    spot_img

    Latest articles

    Related articles

    spot_img

    0