Google maintains search dominance thanks to ads, AI and cloud

Friday 25 April 2025 8:24 am

Google’s father or mother firm, Alphabet, reported a blockbuster earnings report on Thursday night, pushed by surging earnings and speedy developments in AI and cloud computing.

The Magnificent Seven tech behemoth posted income of $90.2bn, a 12 per cent improve 12 months over 12 months.

In the meantime, web earnings surged 46 per cent to $34.5bn, far exceeding Wall Road expectations.

Its efficiency triggered a greater than seven per cent after hours rally in Alphabet inventory.

Matt Britzman, senior fairness analyst at Hargreaves Lansdown, mentioned the agency was nonetheless the ‘king of search’.

“AI is powering new options and driving momentum throughout our enterprise”, mentioned chief government Sundar Pichai.

“We’re excited by the early response to AI Mode and the continued success of AI overviews, now reaching 1.5bn customers month-to-month”.

However at the same time as Alphabet reaps the advantages of AI spend, current tariff headwinds and mounting antitrust actions are intensifying strain for the search big’s future.

Pichai cautioned concerning the results of this exterior surroundings, including: “We’re not going to take a position concerning the broader tariff panorama, however we count on the rollback of the de minimis exemption to be a headwind, significantly for advert spend from Asian retailers”.

Promoting, which stays Google’s core revenue engine, generated $61.7bn within the first quarter.

But, Forrester senior analyst Nikhil Lai warned this power might not final: “Advertisers weren’t coping with tariffs in Q1, in order that efficiency doesn’t mirror present uncertainty”, he mentioned. “Google’s advert income could also be pressured as customers pull again globally.”

Forrester’s principal analyst, Lee Sustar, famous that whereas the agency’s cloud income jumped 28 per cent, “by way of working earnings, it accounts for simply over seven per cent of Alphabet’s complete.”

He additionally warned that any regulatory push to interrupt up Alphabet may complicate the cloud enterprise, which “capabilities as an enabler of Alphabet’s wider operations”.

In the meantime, chief enterprise officer Philipp Schindler pointed to rising challenges. “We’re seeing some pullback in model promoting, with extra spend shifting to direct response”, he mentioned.

Regardless of the strain, the search titan stays targeted on progress.

It introduced a $70bn share buyback and raised its dividend by 5 per cent.

But, regulatory and geopolitical dangers are on the rise, which even Silicon Valley’s strongest gamers aren’t proof against.