SAN FRANCISCO — Google\u2019s corporate parent on Wednesday announced its first-ever quarter with more than $100 billion in revenue, a milestone that illustrates the unwavering power of its internet empire amid legal and competitive threats.<\/p>\n\n\n\n
The news of Alphabet Inc.\u2019s accelerating growth in revenue and profit comes on the heels of a court ruling in the U.S. Justice Department\u2019s landmark monopoly case against Google\u2019s dominant search engine that was widely seen as a mild rebuke<\/a> that wouldn\u2019t hobble the company.<\/p>\n\n\n\n Alphabet performed like a powerhouse during the July-September period, delivering a profit of nearly $35 billion, or $2.87 per share, a 33% increase from the same time last year. Revenue rose 16% from last year to $102.3 billion. Both figures easily exceeded the analysts’ projections that steer the stock market.<\/p>\n\n\n\n Investors celebrated the third-quarter numbers by driving up Alphabet\u2019s stock price nearly 5% in Wednesday\u2019s extended trading.<\/p>\n\n\n\n That\u2019s on top of a 30% surge in Alphabet\u2019s shares that has created nearly $770 billion in stockholder wealth since early September. That\u2019s when U.S. District Judge Amit Mehta rejected a Justice Department proposal<\/a> to break up Google to curb the abuses of a search engine that was declared an illegal monopoly<\/a> last year.<\/p>\n\n\n\n Mehta\u2019s cautious handling of Google\u2019s search monopoly largely reflected his belief that rapid advances in artificial intelligence technology have already been spawning conversational \u201canswer engines\u201d from rising tech stars such as ChatGPT and Perplexity that are giving consumers more options.<\/p>\n\n\n\n ChatGPT\u2019s creator OpenAI and Perplexity have released AI-powered web browsers to compete against Google\u2019s industry-leading Chrome browser that the Justice Department had unsuccessfully tried to persuade Mehta to order to be sold.<\/p>\n\n\n\n But Google has been implanting more AI features into both its search engine and Chrome, as well as its other products, as part of its effort to protect its turf while also expanding into new technological frontiers. In a sign of the inroads those efforts are making, Alphabet CEO Sundar Pichai disclosed<\/a> Wednesday that Google’s AI-powered Gemini app now has 650 million monthly users.<\/p>\n\n\n\n Like other major tech companies, Google has been bankrolling its AI ambitions with a spending spree that has raised worries about a potential bubble that will eventually burst<\/a>. Alphabet now expects to budget $91 billion to $93 billion for capital expenditures this year, up from $85 billion in its previous quarterly report issued in July<\/a>, with most of the money earmarked for the massive data centers needed to power AI.<\/p>\n\n\n\n Alphabet has the luxury of drawing upon a lucrative ad network that Google has spent a quarter century building. Google\u2019s ad sales totaled $74.2 billion in the third quarter, a 13% increase from last year.<\/p>\n\n\n\n The AI craze has been a boon for Google\u2019s Cloud division that oversees data centers for other companies, an endeavor that has turned into the fastest growing part of Alphabet. Google Cloud posted revenue of $15.2 billion in the past quarter, up 34% from last year.<\/p>\n\n\n\n Although Google appears to have fared relatively well in the legal attack on its search engine, it still faces a potentially damaging blow in another case brought by the Justice Department against the technology underlying its ad network.<\/p>\n\n\n\n After condemning parts of Google\u2019s ad technology as an illegal monopoly<\/a> earlier this year, U.S. District Judge Leonie Brinkema is considering ways to handcuff the company in the future.<\/a> The Justice Department is seeking a court order to force Google to sell pieces of its ad network \u2014 an issue that Brinkema isn\u2019t expected to rule on until early next year.<\/p>\n\n\n\n