Alphabet Reports Strong Q3 Earnings, Raises Capital Expenditure Forecast

Alphabet Inc., Google's parent company, reported third-quarter earnings that surpassed analyst expectations, driven by strong demand in advertising and cloud computing services. The company posted revenue of $102.35 billion, exceeding forecasts, and adjusted earnings per share of $3.10, compared to the anticipated $2.26.

The cloud division experienced significant growth, with revenue increasing by 34% to $15.16 billion, fueled by rising enterprise demand for AI infrastructure, including offerings like Vertex AI and Tensor Processing Units. Google's advertising revenue also saw a substantial rise, climbing 12.6% to $74.18 billion, alleviating concerns about the digital ad market.

In response to expanding opportunities and the growing demand for AI, Alphabet raised its 2025 capital expenditure forecast to between $91 and $93 billion, a notable increase from the previous year's $52.5 billion. This marks the third capital expenditure hike in 2025, following earlier increases from $75 billion in February to $85 billion in July. The company's cloud backlog also expanded significantly, reaching $155 billion.

Despite increasing competition from companies like Microsoft, Amazon, and OpenAI's new browser, Google's search business remains stable, bolstered by features such as AI Overviews and AI Mode. As of September, Alphabet's workforce numbered approximately 190,000 employees. Following the earnings release, shares rose 6% in after-hours trading.