Google’s corporate parent Alphabet Inc. has reported another quarter of steady growth amidst a significant shift towards AI technology in its search engine, which is the backbone of its internet empire.

The second-quarter report released on July 23, 2024, reveals that Google continues to attract advertisers following the introduction of an AI feature that generates conversational responses to user queries, reducing the emphasis on traditional links to other websites.

Despite concerns from online publishers about potential declines in traffic, Google remains robust, driving Alphabet’s overall success.

During a conference call, Alphabet CEO Sundar Pichai reassured analysts, stating, “AI is expanding the kinds of queries we can address.” He emphasized the transformative potential of AI technology and its positive impact on Google’s operations.

For the April-June period, Alphabet’s revenue surged 14% year-over-year to $84.74 billion, with a net income of $23.62 billion, translating to $1.89 per share—a 29% increase compared to the previous year. This marks the fourth consecutive quarter of over 10% revenue growth, although the pace has slightly slowed from the previous quarter.

Analysts noted that while the growth isn’t as explosive as last quarter, it confirms Alphabet’s status as a strong earnings-growth entity. Investing.com analyst Thomas Monteiro remarked, “These numbers leave no doubt that Alphabet remains a well-oiled earnings-growth machine.”

Following the report, Alphabet’s stock experienced minor fluctuations but has surged by 30% this year, largely fueled by excitement around AI opportunities, particularly through its DeepMind division and Gemini technology.

Google’s cloud-computing division, which manages data centers essential for powering AI features, is also reaping benefits from this trend. This segment generated $10.3 billion in revenue during the last quarter, marking a 29% increase from the previous year and achieving the $10 billion revenue milestone for the first time in a single quarter.

Pichai stated, “We are innovating at every layer of the AI stack,” highlighting the company’s commitment to advancing AI technology.

In an effort to enhance its cloud services, Google was in talks to acquire cybersecurity firm Wiz for approximately $23 billion, but those negotiations have reportedly fallen through.

Additionally, Google has decided to abandon a plan that would have allowed its Chrome browser to automatically block third-party cookies, opting instead to let users manage their cookie preferences.

As Google builds momentum in both financial performance and AI advancements, it is also awaiting a ruling in a significant U.S. Justice Department antitrust case that could impact its search engine dominance. A federal judge is expected to deliver a decision later this year after reviewing extensive evidence from a high-profile trial.

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