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Alphabet sees increase in net profit, says recently launched AI Mode on Google 'going well' in India
Google's parent company, Alphabet, recorded a 19 per cent year-on-year growth in its net profit in the April-June quarter, worth $28.2 billion. The increase in the tech giant's profit is attributable to the launch of Alphabet's AI model, which has been 'going well'.
Alphabet's performance in the previous quarter was driven by the expansion of its cloud computing division and the positive impact of its AI products. 'We had a standout quarter, with robust growth across the company. We are leading at the frontier of AI and shipping at an incredible pace. AI is positively impacting every part of the business, driving strong momentum,' CEO Sundar Pichai said.
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The company's revenue grew 14 per cent year-over-year to $96.4 billion, largely fueled by strong Google Cloud sales. The cloud division proved to be a major driver of growth, with revenue increasing 32 per cent from the previous year to $13.62 billion.
Cloud platform and AI emerge as stars of the show
Alphabet has been witnessing a boom, and the credit goes to the high demand for Google Cloud Platform (GCP) and an expansion of its core products like AI infrastructure and generative AI solutions.
To keep up with rising demand for its cloud products and AI-driven services, Alphabet has raised its capital expenditure forecast for 2025. The company now plans to invest around $85 billion this year, up from its earlier estimate of $75 billion.
Anat Ashkenazi, chief financial officer (CFO) of Alphabet, said, 'Our updated outlook reflects additional investment in servers, the timing of delivery of servers, and an acceleration in the pace of data centre construction, primarily to meet cloud customer demand.'
The company's end-to-end AI search experience on Google, AI Mode, has been launched in the US and India, and 'has received positive feedback'. AI Overview on Google now has over 2 billion monthly users in more than 200 countries.
Still, some analysts warned that the higher spending may draw fresh scrutiny from investors, who have largely stayed on the sidelines this year. Alphabet shares are up just 0.5 per cent in 2025, trailing Microsoft's 20 per cent increase and a 22 per cent rise in Meta stock, also held back by regulatory battles that are looking to break its illegal monopoly in the search and ad-tech markets.
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