Google Reports 35% Growth in Cloud Business and 12% Increase in YouTube Ads for Q3 2024

Alphabet, Google’s parent company, recently released its financial results for the third quarter of 2024, revealing significant growth in its cloud services and increased revenue from YouTube advertising. This growth is largely attributed to investments in artificial intelligence (AI) and increased election-related spending in the U.S. Total revenue for the company rose by 15% to $88.3 billion, with an operating margin of 32%.

Key Financial Highlights for Alphabet in Q3 2024:

• Total Revenue: $88.3 billion, a 15% year-over-year (Y/Y) increase.
• Operating Margin: 32%, up 4 percentage points Y/Y.
• Earnings Per Share (EPS): $2.12, surpassing estimates by $0.27.

35% Growth in Google Cloud

Google Cloud achieved a 35% increase in revenue, reaching $11.4 billion. The operating margin for this segment rose to 17%, marking a 14 percentage-point improvement from the same period last year. This growth is largely driven by the strong adoption of AI solutions for Google’s cloud infrastructure clients. Increased demand for cloud computing services helped Google surpass analyst expectations, which had projected revenue at $10.86 billion.

YouTube Ads Revenue Climbs by 12%

YouTube’s advertising revenue grew by 12% to reach $8.9 billion, showing steady recovery from previous downturns. Part of this renewed interest in YouTube advertising comes from U.S. election spending and the platform’s updated ad capabilities.

The Impact of AI Investments

Alphabet continues to make substantial investments in AI, particularly with products like the Gemini AI chatbot and AI-powered search functions. These innovations are expected to help Alphabet maintain its competitive edge among rivals like Amazon and Microsoft.

Market and Stock Reaction

Following the earnings release, Alphabet’s stock rose nearly 6% in after-hours trading. Shares of its primary competitors, Amazon and Microsoft, also saw a 1% increase.

Analysts’ Insights

Analysts have noted Alphabet’s impressive performance, especially in its cloud business, which plays a critical role in supporting emerging AI solutions. This growth positions Alphabet well among other industry leaders.

Conclusion

Alphabet’s financial results highlight strong growth in both its cloud and advertising sectors. By investing in AI and new technologies, Alphabet is solidifying its market position, even as regulatory challenges and competition intensify.

These trends underscore Google’s long-term strategy to maintain its leadership in the tech and digital advertising markets, with a focus on innovation and expanding services that make it one of the key players in the industry. Contact us, and we will provide a professional approach to each advertising strategy, using all the possibilities of the YouTube platform to increase the profits of your business.

This article available in Ukrainian.