Shares of Alphabet, Inc. (GOOGL) (GOOG) climbed in Thursday's after-hours session after the Google parent announced forecast-beating quarterly results and played down macroeconomic fears.

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The company maintained its capital spending plans and announced additional stock repurchases and a dividend hike.

The search giant's results augur well for the rest of the big techs, which will report earnings next week.

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Following the earnings release, Alphabet stock climbed 4.28% to $166.95 in Thursday's after-hours.

Stung by macroeconomic concerns, the stock has lost about 16% this year and trades well below its all-time high of $207.05, hit on Feb. 4.

Key Q1 Numbers

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The Mountain View, California-based company reported earnings per share (EPS) of $2.81 and revenue of $90.23 billion, higher than the year-ago's $1.89 and $80.54 billion, respectively.

The results also beat the Finchat-compiled consensus estimates of $2.01 and $89.15 billion, respectively.

While the EPS improved from the fourth quarter's $2.15, revenue fell about 6.5% from the prior three-month period.

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CEO Sundar Pichai said, "We're pleased with our strong Q1 results, which reflect healthy growth and momentum across the business."

Chief Business Officer Philipp Schlinder said, "We're obviously not immune to the macro environment," according to the transcript sourced from Koyfin. "But we wouldn't want to speculate about potential impacts beyond noting that the changes to the de minimis exemption will obviously cause a slight headwind to our ads business in 2025, primarily from APAC-based retailers."

Segmental Performance

Alphabet noted that its Google Services revenue climbed 10% year over year (YoY) to $77.3, thanks to strong performance across Google Search and others (up 10%), Google subscription, platform and devices (up 18.8%), and YouTube ads (up 10.3%).

Financial services and retail verticals drove search revenue.

Pichai noted that the search business saw strong growth, helped by greater engagement with features like AI overviews. This artificial intelligence feature now had 1.5 billion users, he said.

The executive noted that paid subscriptions surpassed 270 billion, driven by Google One and YouTube. YouTube Music and Premium subscriptions reached over 125 million, including trials, up more than five times from a year ago.

Google Cloud revenue rose 28% to $ 12.26 billion, with the growth slowing from the previous quarter's 30%. According to CNBC, the cloud business' contribution was roughly in line with the consensus estimate of $12.27 billion.

Other bets, including Waymo's self-driving unit, Google Fiber, and Google Play Store, contributed $450 million to total revenue.

Traffic acquisition cost (TAC) climbed 6.2% YoY to $13.75 billion, versus the consensus of $13.66 billion.

Operating income jumped 20% to $30.61 billion, with Google services contributing $32.68 billion and Google Cloud $2.18 billion. Other bets posted a wider operating loss of $1.23 billion.

Capex, Capital Returns

CFO Anat Ashkenazi said on the earnings call that the company plans to invest $75 billion in capex this year.

The company said its board has authorized repurchasing up to $70 billion in Class A and Class C shares. The board also declared a quarterly cash dividend of $0.21, up 5% from the previous dividend, payable on June 16, to shareholders on record as of June 9.

Retail Mood Revs Up

On Stocktwits, retail sentiment toward the Alphabet stock improved to 'extremely bullish' (90/100) by late Thursday from 'bullish' a day ago, with the message volume perking up to 'extremely high.' levels.

Screenshot 2025-04-24 at 10.13.27 PM.png — GOOGL sentiment and message volume as of 10:14 p.m. ET, April 24 | source: Stocktwits

The final tally of a Stocktwits poll that asked users whether they were 'bullish' or 'bearish' on Alphabet ahead of earnings showed that 77% were positive. The poll received responses from 3,500 users.

A bullish watcher said they expected the stock to move toward $180 on Friday, and another user pointed to a bullish flag formation.

Another user likened Alphabet stock to gold, a safe haven bet that has recently climbed to a record high.

Alphabet stock is the cheapest among the Magnificent Seven, trading at a forward price-earnings (P/E) multiple of 18 times.

The Koyfin-compiled consensus analysts' price target suggests the stock has a 27% upside from Thursday's close.

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