Google, one of the leading tech companies in the world, has officially surpassed the $2 trillion market capitalization milestone. This significant achievement comes after a challenging year in which the company faced two major threats: the rapid growth of generative AI and increasing regulatory pressures. Generative AI, in particular, prompted Google to make substantial changes to its core search technology, reorganize key teams, and launch its own AI model, Gemini, to seize new opportunities.
In response to these challenges, Google executives streamlined projects and reduced staff. However, the company showed its adaptability and resilience by announcing its first-ever dividend and a $70 billion share buyback alongside its Q1 2024 earnings report. This news was well received by investors, as Google’s parent company, Alphabet, maintained a $2 trillion market cap throughout an entire day of trading, a level it had briefly reached in November 2021. Currently, Google is the fourth most valuable public company, trailing Nvidia ($2.2 trillion), Apple ($2.6 trillion), and Microsoft ($3.0 trillion).
Google’s Q1 2024 earnings results reflect a strong performance: the company reported a $23.7 billion profit on $80.5 billion in revenue. This represents a 15% increase in revenue year over year, and a 14% increase in profit compared to the previous quarter, which included the holiday season—a traditionally high-revenue period. Despite employee cutbacks to boost profits, layoffs seem to have slowed or paused, with Google reporting that it spent $716 million on severance and related charges across January, February, and March.
Google is also exploring ways to capitalize on its investment in AI. The company has already begun using AI to help advertisers target specific audiences through its Performance Max tool, resulting in a 63% increase in the likelihood of publishing campaigns with strong ad performance. Other AI-based initiatives are underway, such as Discover Financial’s rollout of AI tools to nearly 10,000 call center agents and Ikea’s adoption of value-based bidding solutions. However, Google is careful not to disrupt its core search business too much, with CEO Sundar Pichai emphasizing a balanced approach.
Google is also strengthening its presence in the battle against TikTok and Instagram Reels, with YouTube Shorts gaining traction. The company reported a 50% increase in creator uploads of YouTube Shorts and a 12% rise in Shorts monetization in the last quarter alone.
Google’s upcoming developer conference, Google I/O, scheduled for May 14th, is expected to provide further insights into the company’s plans for AI and other technological advancements.
For more details, check out the full report on The Verge
https://www.theverge.com/24140489/google-alphabet-q1-2024-earnings-revenue
