Alphabet Crushes Q3: Stock Soars After-Hours As Retail Traders Hail Google Parent As Next $4 Trillion Giant

• Google advertising revenue climbed 12.6% to $74.18 billion, with Search revenue up 14.5% and YouTube ad revenue rising 15%. 
• Alphabet said Google Cloud ended the quarter with a backlog of $155 billion. 
• The company guided capital expenditure (Capex) for 2025 to $91 billion-$93 billion, up from the $85 billion it projected in late July.

Alphabet, Inc.’s (GOOGL) shares climbed over 6.6% in Wednesday’s extended session after the Google parent reported a strong quarterly beat. 

For the year-to-date period, Alphabet’s stock has jumped 45.5%.

Alphabet’s Q3 Earnings Snapshot

Mountainview, California-based Alphabet reported what CEO Sundar Pichai called a “terrific quarter” with double-digit year-over-year (YoY) growth across every significant part of its business. The company reported its first $100 billion quarter. Pichai also talked up the company’s full-stack approach to artificial intelligence (AI).

Here’s how the headline numbers for the third quarter of the fiscal year 2025 panned out:

-Earnings per share (EPS): $2.87 Vs. $2.27 consensus (Fiscal.ai-compiled)

-Revenue: $102.35 billion (16% YoY) Vs. $100.14B consensus

Pichai said, “We’re shipping at speed, including the global rollout of AI Overviews and AI Mode in Search in record time.” He noted that the company’s first-party models, like Gemini, now process 7 billion tokens per minute, via direct API use by our customers. The Gemini App now has over 650 million monthly active users (MAUs), he added.

Google advertising revenue climbed 12.6% to $74.18 billion, with Search revenue up 14.5% and YouTube ad revenue rising 15%. Other bets generated $344 million in revenue, while the business's operating loss widened to $4.47 billion. Google said it has over 300 million subscribers, led by Google One and YouTube Premium.

Alphabet noted that its operating income climbed 9%, with the operating margin at 30.5%. If note for a charge related to an European Union fine, these metrics would have been 22% and 33.9%, respectively.

Alphabet’s board declared a quarterly cash dividend of $0.21, payable on Dec. 15, to shareholders of record as of Dec. 8. The company guided capital expenditure (Capex) for 2025 to $91 billion-$93 billion, up from the $85 billion it projected in late July.

Google Cloud Acceleration

Alphabet said Google Cloud ended the quarter with a backlog of $155 billion. Google Cloud revenue climbed 34% YoY to $15.2 billion in the third quarter, led by growth in Google Cloud Platform (GCP) across core products, AI Infrastructure, and Generative AI (GenAI) Solutions. The growth accelerated from the 32% pace in the second quarter.

Alphabet’s Outlook

Speaking on the post-earnings call, CFO Anat Ashkenazi said forex will be a tailwind to the company’s revenue in the fourth quarter, according to a Koyfin transcript. “As for our segments, in Google Services, year-over-year comparisons in advertising will be negatively impacted by the strong spend on U.S. elections in the fourth quarter of 2024, particularly on YouTube.”

Interestingly, the company also said that Shorts ads are generating revenue at a higher rate than traditional YouTube ads.

She forecasts cloud strength to continue, underpinned by strong demand for enterprise AI infrastructure, including TPUs and GPUs; enterprise AI solutions driven by Gemini 2.5 and other AI models; and core GCP infrastructure and other services such as cybersecurity and data analytics. 

Delving into the pace of server deployments and data center construction, Ashkenazi said Google still expects to remain in a tight demand-supply environment in the fourth quarter and 2026.

What Retail Says About Alphabet’s Q3

On Stocktwits, retail sentiment toward Alphabet stock improved further into the ‘extremely bullish’ territory and the message volume spiked to ‘extremely high’ levels.

A bullish user said Alphabet would be the next $4 trillion market-capitalization name. Based on Wednesday’s closing price of $274.57, the company is valued at $3.326 trillion.

Another watcher was left amazed at the quarter. “What a quarterly report!” they said, adding that the stock has still room to run even with the post-market bump.

Munster Lauds Q3 Print

Deepwater Asset Management’s Gene Munster praised the company for accelerating Search in the face of chatbots. He expects the momentum to continue. While noting that the Google management said AI Mode had 75 million users in the U.S. and that the company is testing ads, Munster said, “It’s only a matter of time before AI Mode ads are fully turned on.” “When they are, it will likely be a net positive for revenue growth even though some users may feel the ads clash with the spirit of generative AI providing a “real” answer.”

He also expects a Waymo initial public offering (IPO) by 2027.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next:  Meta Stock Sinks After-Hours As $16B Tax Provision Hits Q3 Profit — But Retail Smells A Bargain Amid Zuckerberg’s AI Optimism

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