Alphabet shares jump after Q1 beat and $70bn buyback

ByInvestment Club

Overview

Alphabet reported a strong start to 2025, with double-digit revenue and earnings growth driven by strength across Google Search, YouTube Ads, Google Cloud, and subscription services. Profitability improved significantly, and the company announced a dividend increase and an expanded share repurchase program.

CEO Sundar Pichai emphasized the momentum in AI and product innovation: “We’re pleased with our strong Q1 results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique full stack approach to AI. This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation.”

Q1 2025 vs. Q1 2024:

  • Consolidated revenues increased to $90.2bn (+12% YoY), reflecting robust momentum across the business, with Google Search & other, YouTube ads, Google subscriptions, platforms, and devices, and Google Cloud each delivering double-digit growth rates.
    • Google Services revenues recorded a value of $77.3bn (+10% YoY), reflecting strong performance across Google Search & other ($50.7bn), Google subscriptions, platforms, and devices ($10.4bn), and YouTube ads ($8.9bn).
    • Google Cloud revenues grew to $12.3bn (+28% YoY), led by growth in Google Cloud Platform (GCP) across core GCP products, AI Infrastructure, and Generative AI Solutions.
    • Other Bets revenues declined to $450m (-9% YoY), with a operating loss which widened to $1.2bn (compared to a loss of $1.02bn in Q1 2024).
  • Total operating income rose to $30.6bn (+20% YoY), while operating margin expanded to 34% (+2pp YoY).
    • Google Services operating income increased to $32.7bn (+17% YoY).
    • Google Cloud operating income more than doubled to $2.2bn (+142% YoY).
  • Net income surged to $34.5bn (+46% YoY), with diluted EPS of $2.81 (compared to $1.89 in Q1 2024).
  • Alphabet launched in Q1 2025 Gemini 2.5 across Search, Workspace, and Cloud. AI Overviews now serve 1.5bn+ users monthly.
  • Subscriptions surpassed 270m paid subscriptions, driven by Google One and YouTube Premium.
  • The company continued investment in R&D with $13.6bn in Q1 (+14% YoY), primarily focused on AI and infrastructure.
  • Alphabet realized $9.8bn gain on equity securities, contributing to strong net income.
  • The company announced a 5% increase to the dividend, resulting in a quarterly cash dividend of $0.21, totaling $2.4bn in Q1 payouts.
  • The company also will have share repurchase of: new $70bn buyback authorization approved in April 2025.

Alphabet remains focused on scaling its AI ecosystem across all products, with further rollouts of Gemini models and enterprise AI tools expected throughout 2025. The company continues to invest in long-term growth drivers like Cloud, infrastructure, and multi-device integration while maintaining strong capital discipline and shareholder returns.

The publication of the results for the first quarter of this year seems, at first glance, to reverse the downward trend in the GOOGL share price that began somewhere in February, when it broke below the 50-day moving average. Now, after the increase of almost +5% in the post-market brought by the reporting of the results, the stock price of the company’s shares has again reached the moving average, and with an RSI that is around 50, investors could be tempted by this possible buy signal that is expected for the next period, although global uncertainty still remains at quite high levels.

Source: TradingView

Author: Ionuț-Adrian Lazar

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