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Alphabet Stock Earnings: Alphabet shares rose 4% on Thursday after the tech giant reported stronger-than-expected results for the third quarter. The company also raised its annual capital spending target, signaling continued confidence in its artificial intelligence strategy.
The Google parent said it now expects to spend between $91 billion and $93 billion this year on AI infrastructure, up from its earlier projection of $85 billion.
The increased investment comes as demand for Alphabet’s cloud services remains strong, underscoring the company’s focus on expanding its AI capabilities to support future growth.
Alphabet CEO Sundar Pichai revealed that Google Cloud closed the quarter with a backlog worth $155 billion, reflecting strong demand for the company’s services.
Chief Financial Officer Anat Ashkenazi told investors during Wednesday’s earnings call that capital spending is expected to rise sharply through 2026.
She said the increased investment will support the company’s long-term growth plans and expanding artificial intelligence infrastructure.
Deutsche Bank analysts praised Alphabet’s latest quarterly results, calling them “virtually flawless.” The bank noted that investor expectations were already elevated, with Alphabet’s stock climbing 43% since the company’s second-quarter earnings release.
For the third quarter, Alphabet reported adjusted earnings of $3.10 per share on revenue of $102.35 billion. It was the first time the company’s quarterly revenue crossed the $100 billion mark, underscoring its strong performance across key business segments.
Analysts polled by LSEG had anticipated Alphabet to report earnings of $2.33 per share on revenue of $99.89 billion. The company’s stronger-than-expected performance and higher capital spending reaffirmed its growing dominance in artificial intelligence.
In a note to investors, Goldman Sachs said Alphabet has successfully eased investor concerns over its AI strategy during the past year. The firm added that there is no sign of the company losing momentum, as its continued progress and results have further strengthened market confidence.
Goldman Sachs raised its price target for Alphabet to $330 from $288 after the company delivered another strong quarter. Analysts also paid close attention to how artificial intelligence is shaping Google’s core search business, which remains a major source of revenue.
Google’s search segment brought in $56.56 billion during the quarter, a 15% increase from the same period last year.
JPMorgan analysts said that while AI was once viewed as a potential threat to Google’s search dominance, it now appears to offer greater opportunity.
The firm lifted its price target for Alphabet to $340 from $300, reflecting growing optimism about the company’s ability to leverage AI to strengthen its market leadership.
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