-- Alphabet's (GOOG, GOOGL) first-quarter results exceeded Wall Street's estimates as revenue for Google's cloud and services businesses climbed.
Per-share earnings rose to $5.11 from $2.81 a year earlier, compared with the GAAP consensus on FactSet of $2.63. Revenue increased 22% to $109.9 billion, above the Street's $106.96 billion view.
The company's shares were up 5.4% in after-hours trading.
The Google cloud segment's sales surged 63% to $20.03 billion, driven by enterprise artificial intelligence solutions and infrastructure, Alphabet said.
Google services revenue increased 16% to $89.64 billion in the first quarter, buoyed by a jump in advertising to $77.25 billion from $66.89 billion.
"This was our strongest quarter ever for our consumer AI plans, driven by the Gemini App," Alphabet and Google Chief Executive Sundar Pichai said in a statement. "Overall the number of paid subscriptions has now reached 350 million, with YouTube and Google One being the key drivers."
Wedbush Securities expected "another strong beat," saying Wall Street was underestimating growth potential of cloud, AI-powered search, and YouTube.
"This print will reinforce that Alphabet is well-positioned to grow across its vertically integrated AI flywheel spanning Gemini 3, custom (tensor processing units) silicon, a hyperscale cloud business at a ($70 billion-plus) run rate, and its valuable consumer ad property," Wedbush analysts, including Dan Ives, said in a note on Wednesday ahead of the earnings release.
Alphabet's shares gained about 11% so far this year through Wednesday close.