Google parent Alphabet Inc. showed on Tuesday that an expensive foray into artificial intelligence is starting to pay off, delivering better-than-expected traction for its cloud computing business and driving more usage for its flagship search engine.
Reporting healthy gains in both revenue and profit, Google did much to allay Wall Street concerns that the company has squandered an early lead in AI, and that its heavy investments to catch the likes of Microsoft Corp. and OpenAI might not yield dividends. Revenue, excluding partner payouts, increased to $74.6 billion, up about 16% from the year-ago quarter and surpassing the $72.9 billion analysts predicted on average, according to data compiled by Bloomberg. Net income was $2.12 per share, the company said Tuesday in a statement, compared with estimates of $1.84 per share.