Google parent Alphabet (GOOG, GOOGL) reported fiscal third-quarter earnings after the bell on Tuesday, beating analysts’ estimates on revenue and profit, as its cloud businesses continued to expand and Big Tech’s profits with a robust bottom line initiated.

The search giant reported earnings per share of $2.12 on revenue of $88.27 billion. Analysts expected earnings per share of $1.83 on revenue of $86.44 billion, according to data compiled by Bloomberg.

Advertising revenue topped $65.85 billion, compared with analyst expectations of $65.5 billion and up from $59.65 billion in the year-ago period.

According to Bloomberg data, Alphabet reported the following in its fiscal third quarter:

• revenue: $88.27 vs. expected $86.44 billion ($76.69 billion in Q3 2023)

• Adjusted earnings per share: $2.12 vs. $1.83 expected ($1.55 in Q3 2023)

• Cloud revenue: $11.35 billion vs. expected $10.79 billion ($8.41 billion in Q3 2023)

• Advertising revenue: $65.85 vs. expected $65.5 billion ($59.65 billion in Q3 2023)

Shares of Alphabet rose more than 3% in after-hours trading on Tuesday.

The increase in cloud revenue comes as rivals Microsoft (MSFT) and Amazon (AMZN) are also expected to expand their cloud businesses and increase their investments in AI infrastructure. With the introduction of increasingly sophisticated AI-powered chatbots, Google is also facing competition in its own country. On Monday, Information reported that Meta (META) is developing its own search engine to power its Meta AI chatbot and provide users with conversational answers to their questions and prompts.

How the next generation of answer engines will compete with Google’s traditional and AI-powered search remains a key question for the company.

Google is the first of the Big Tech platforms to release a report this week. Meta and Microsoft are expected to report quarterly results on Wednesday, followed by Amazon (AMZN) and Apple (AAPL). While all mega-cap stocks have posted gains so far this year, companies have taken different paths as investors no longer measure their AI spending and the success of their businesses in lockstep.

Hamza Shaban is a reporter for Yahoo Finance covering markets and economics. Follow Hamza on X @hshaban.

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