AI Gives Google the Edge in the Second Quarter
Alphabet is seeing an upswing in stock value after posting positive earnings for the previous quarter.
Quick overview
- Alphabet (GOOG) exceeded earnings expectations in its second quarterly report, largely due to its focus on AI.
- The company's stock is projected to rise following the report, despite concerns over a planned $10 billion spending for 2025.
- Alphabet's advertising revenue increased by 10% year-on-year, indicating successful investments in AI technology.
- GOOG has introduced a new AI program, Google AI Ultra, available to U.S. customers for $249 a month.
Alphabet (GOOG) posted its second quarterly earnings report on Wednesday after trading had finished for the day, attributing part of its better-than-expected results to its AI focus.
Google’s parent company Alphabet beat earnings estimates when they posted their second quarterly earnings report on Wednesday, after trading has closed off. The company’s stock is expected to climb on Thursday as a result, but the planned $10 billion in spending for 2025 may hold them back.
Alphabet is spending an incredible amount on investing into AI research and programming, expecting that its bid will pay off in a big way. Already, more than 1.5 billion people use AI services from Google, and the company is expecting those numbers to increase. As controversial as some aspects of AI usage may be, internet users simply cannot get away from the technology. It is too pervasive at this point and is likely to become more so.
Alphabet’s Stock Changed Quickly
When news broke that Alphabet would be investing so heavily in tech this year, the stock price initially dropped. But that changed when the company revealed that it has seen a 10% increase in advertising revenue year-on-year. This demonstrates that the company’s efforts are paying off and that their advertising arm is growing substantially.
In premarket trading. GOOG stock was up 3.44%, and it is expected to increase even further throughout Thursday. Advertising revenue is earned in a big part through AI technology, so it makes sense that the company would invest so much into the tech moving forward. If they want to increase advertising revenue even more, they will have to improve their tech and train it to better appeal to users.
GOOG is now one of the biggest movers in premarket trading for the day, and they intend to keep their momentum going. They announced a VIP pass for their AI program called Google AI Ultra. That plan is available to U.S. customers for $249 a month for now.
GOOG stock is expected to improve throughout 2025, with Citi moving their estimated price point from $203 to $225. Currently, the company’s stock is priced at $198 and is down from its early 2025 high of $207.
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