Alphabet, the parent company of Google and YouTube, reported first-quarter earnings that exceeded analysts' expectations, mainly thanks to strong results in its core search advertising business. At the same time, Google Cloud - the company's key growth metric - saw a significant increase in profitability, Euronews reported.

Alphabet's continued investment in artificial intelligence (AI) is underpinning growth across all segments. CEO Sundar Pichai said, "We are pleased with our strong first quarter results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique approach to AI."

Alphabet shares rose nearly 5% in after-hours trading, following a 2.5% gain during regular trading on April 24. Despite the upbeat results, shares remain 16% lower year-to-date amid a broad sell-off in the tech sector triggered by Donald Trump's tariff-related concerns on Wall Street. 

Alphabet's board of directors also approved an additional $70 billion in stock buybacks and raised its dividend 5% to $0.21 per share.

Alphabet reported total revenue of $90.2 billion, up 12% year-over-year and exceeding analysts' expectations of $89.12 billion. Advertising on Google's search engine remained the largest source of revenue, generating $50.7 billion in the quarter, a 9.8% year-over-year increase.

The company recently rolled out AI Overviews in Google Search, which summarize results at the top of the page. The feature has gained popularity, attracting 1.5 million monthly users and has become a focal point in the company's competition with Microsoft's ChatGPT and other chatbot technologies. However, the rollout has led to a decline in traffic on independent websites.

In addition, the company warned that U.S. customs policy could negatively impact advertising revenue this year. Google's chief business officer Philip Schindler said President Donald Trump's decision to end the de minimis trade exemption will create a “slight headwind” for advertising revenue, particularly from Asia-Pacific-based retailers. | BGNES