Alphabet jumps 3% as search, advertising units show resilient growth

Core Insights - Alphabet reported adjusted earnings of $2.27 per share, exceeding analyst expectations, with net income rising 46% to $34.54 billion, or $2.81 per share, compared to $23.66 billion, or $1.89 per share, in the previous year [1][2] Financial Performance - The company posted revenues of $90.23 billion, surpassing the expected $89.12 billion, with a year-over-year growth of 12%, ahead of the anticipated 10% [2] - Advertising revenues reached $66.89 billion, reflecting an 8.5% growth from the previous year, while YouTube's advertising revenue was reported at $8.93 billion, slightly below the $8.97 billion estimate [5] - The "Search and other" unit grew 9.8% to $50.7 billion, up from $46.16 billion last year, with the AI Overviews tool accumulating 1.5 billion monthly users [6] Market Position and Strategy - Morgan Stanley noted that Alphabet's pace of GenAI product roll-out is accelerating, despite macroeconomic uncertainties, maintaining an overweight position on the stock due to its strong relative position [3] - Alphabet's business chief indicated that the end of the de minimis trade exemption could create a slight headwind for the ads business in the Asia-Pacific region [4] - Analysts believe Wall Street is underestimating the monetization potential from AI tools and cloud demand, with positive comments on Gemini's performance and AI Overviews adoption helping to alleviate investor concerns [6][7]