Alphabet, Google's parent company, and Microsoft (MS) both reported 'earnings surprises' on the 25th (local time), exceeding expectations thanks to growth in the cloud sector.
Alphabet announced after the New York Stock Exchange closed that its second-quarter earnings per share (EPS) were $1.44. This surpasses the market consensus of $1.33 compiled by Refinitiv. Alphabet's second-quarter revenue reached $74.6 billion, a 7% increase year-over-year, also exceeding the market forecast of $72.82 billion.
Google's advertising revenue rose from $52.69 billion last year to $58.14 billion this year. YouTube advertising revenue was $7.67 billion, beating the market estimate of $7.43 billion. Additionally, revenue from the cloud segment surged by 28%. The 'Other Bets' segment, which includes Verily in life sciences and Waymo in autonomous vehicles, achieved $285 million in revenue. Supported by these better-than-expected results, Alphabet's stock price is currently up more than 6% in after-hours trading.
On the same day, MS announced that its second-quarter (fiscal fourth quarter) revenue increased 8% year-over-year to $56.19 billion, surpassing the market consensus of $55.47 billion compiled by Refinitiv. However, the year-over-year growth rate remained in the single digits for three consecutive quarters for the first time since 2017. MS's quarterly earnings per share were $2.69, exceeding the market estimate of $2.55.
Revenue from the Intelligent Cloud segment, including Azure cloud computing, rose 15% year-over-year to $23.99 billion, also beating StreetAccount's market estimate of $23.79 billion. Azure cloud revenue growth slightly slowed to 26% from 27% in the previous quarter. Wall Street had expected Azure to grow by 25%. MS is scheduled to hold a conference call at 5:30 p.m. Eastern Time to provide guidance and other updates, and its stock is currently down more than 1% in after-hours trading.
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