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Alphabet's Shares Soar on Stellar Q2 Earnings and Impressive Cloud Revenue Growth

Alphabet Inc.'s shares jumped almost 7% early Wednesday, fueled by robust second-quarter earnings that exceeded predictions, and a significant year-over-year increase in revenue from cloud services.


On Tuesday, the tech giant reported adjusted earnings per share at $1.44, surpassing the anticipated $1.34 according to a Refinitiv analyst survey. Additionally, the company posted revenue of $74.6 billion for the second quarter, outperforming the estimated consensus of $72.82 billion.


However, the significant uptick in cloud computing revenue was the primary highlight. Alphabet recorded $8.03 billion from Google Cloud sales, surpassing the StreetAccount consensus of $7.87 billion. Google Cloud is in direct competition with industry giants Amazon Web Services and Microsoft Azure.


For the second quarter in a row, Google's cloud division announced a profitable operation. It achieved an operating income of $395 million for the period, in sharp contrast to the $590 million loss in the same quarter last year.


Wall Street analysts applauded these outcomes. "Regardless of the questions surrounding AI's effect on main products or cost structures, Alphabet has been leading in AI investments over the past five or six years and is well-positioned to seize the opportunities presented by this trend in the upcoming decade," said Eric Sheridan, a Goldman Sachs analyst.


Alphabet also shared news of executive reshuffling on Wednesday, with CFO Ruth Porat transitioning into a newly formed position as President and Chief Investment Officer. Porat will continue her CFO duties until a replacement is found, as confirmed by the company's press release.

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