Alphabet Inc Class C (NASDAQ:GOOG) stock fell 4.15% (As on July 24, 11:20:59 AM UTC-4, Source: Google Finance) after the company beat forecasts over the latest quarter as ad sales and cloud computing revenue came in strong. The tech giant said that net income jumped more than a quarter to $23.6 billion. Advertising revenue – its main source of income – jumped 11% to almost $65 billion versus analysts’ expectations of $64.5 billion. Sales were helped by big events like the upcoming Paris Olympics. YouTube ad revenue, however, fell short, with the segment bringing in $8.66 billion versus expectations of $8.95 billion. Google saw cloud revenue of $10.35 billion and operating income of $1.17 billion. That’s better than analyst expectations of $10.1 billion and operating income of $982.2 million and higher than the $8 billion in revenue and $395 million in operating income the company reported in Q2 2023.

Further, in the second quarter, Alphabet reported spending $2.2 billion building AI models across its DeepMind and Google Research organizations. That’s up from $1.1 billion in Q2 2023. When exactly AI starts to generate revenue for Google’s Cloud business, let alone its ad segment, is still up in the air. Google is still trying to find its footing with AI Overview, the generative AI feature that shows up at the top of Google Search results pages. In May, the company rolled out the search function, only for users to quickly discover that its answers weren’t always accurate. While it spends on AI, Alphabet has been cutting in other areas, including headcount. In Q2, the company reported having 179,582 employees, down from 181,798 in the same period last year.

GOOG in the second quarter of FY 24 has reported the adjusted earnings per share of $1.89, beating the analysts’ estimates for the adjusted earnings per share of $1.85. The company had reported the adjusted revenue growth of 14 percent to $85 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue of $84.3 billion, according to data compiled by Bloomberg. That’s a jump from the same period last year of 31% and 14%, respectively. The company’s operating margin was reported at 32%, marginally higher than the forecasted 31.8%. Alphabet’s capital expenditures were $13.19 billion, exceeding the anticipated $12.23 billion, indicating ongoing investments in its core and emerging businesses.

Additionally, GOOG has announced a cash dividend of $0.20 per share that will be paid on September 16, 2024, to stockholders of record as of September 9, 2024, on each of the company’s Class A, Class B, and Class C shares.