Google’s parent begins year with robust growth despite legal, competitive and economic threats
The Google logo is seen outside a building housing Google offices in Beijing on February 4, 2025. (Photo by GREG BAKER / AFP)
AP — Google’s profits soared 50 percent in this year’s opening quarter. Alphabet overcame competitive and legal threats that its internet empire faces amid an economy roiled by a global trade war.
The numbers released Thursday by Google parent Alphabet Inc. indicated the company is rising to the challenge so far. However, investors are likely to remain concerned about the turbulent times ahead.
The Mountain View, California, company earned $34.5 billion, or $2.81 per share, during the January-March period. This was up from $23.7 billion, or $1.89 per share, at the same time last year.
Revenue rose 12 percent from last year to $90.2 billion. The results easily exceeded analysts’ projections, according to FactSet Research.
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“We continued to see healthy growth and momentum across the business,” Alphabet CEO Sundar Pichai told analysts Thursday during a conference call.
Alphabet’s stock gained more than 4 percent in extended trading after the numbers came out. The shares had fallen by 16 percent since the end of last year.
Google’s first-quarter performance illustrated the continuing power of its long-dominant search engine in a sea of uncertainty.
The company is grappling with competitive threats emerging as artificial intelligence reshapes technology. Google is also battling court decisions condemning its search engine and digital ad network as illegal monopolies.
AI-driven upheaval
The AI-driven upheaval has opened new opportunities for people to find helpful advice, insights and information. This is through more conversational search options from the likes of OpenAI and Perplexity.
Google’s long-dominant search engine is countering the new competition with a feature called AI Overviews that appear above web links in its results.
The firm is also testing a conversational tool called AI Mode. This would usher in an even more radical change to its business model.
“The company delivered a sound response to those questioning the solidity of the search business amid ever-increasing AI demand,” Investing.com analyst Thomas Monteiro said.
But Google is trying to keep its business intact as the US Justice Department attempts to break up the company and impose other restraints. This, after a federal judge last year branded its search engine an illegal monopoly.
To make matters worse, its digital ad network also was found to be illegally abusing its power earlier this month in another case brought by the Justice Department.
More uncertainty
President Donald Trump’s trade war has injected more uncertainty into the mix. It has rattled the financial markets amid fears the tariffs will reignite inflation while dragging the economy into a recession.
Google’s digital services aren’t directly impacted by the tariffs. Still, a recession would likely curtail the spending on ads that generate most of Alphabet’s revenue.
But there were few signs of a slowdown in the past quarter. Google’s ad revenue during the period totaled $66.9 billion, an 8 percent increase from the same time a year ago.
Although Google’s executives are mostly upbeat during Thursday’s call, they also acknowledged conditions should the trade war trigger a recession.
“We are obviously not immune to the macro environment,” said Philipp Schindler, Alphabet’s chief business officer.
The past quarter’s steady growth emboldened Alphabet to stand firm on plans to invest $75 billion on AI and other technologies this year. It is also pursuing approval of a $32 billion deal to buy cybersecurity firm Wiz.
