Friday, July 19, 2024

Google parent announces first-ever dividend; beats on sales, profit; shares soar

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Alphabet announced its first-ever dividend on Thursday and a $70 billion stock buyback, cheering investors who sent the stock surging nearly 16% after the bell.
The Google parent is returning capital while spending billions of dollars on data centers to catch up with rivals on generative artificial intelligence. The dividend will be 20 cents per share.
Just three months ago, Alphabet’s Big Tech rival, Meta Platforms announced its own first-ever dividend, a move that lifted the social media company’s stock market value by $196 billion the following day.

Amazon remains the lone holdout among Big Tech firms not offering a dividend.

Alphabet beat expectations for the quarter in sales, profit and advertising – metrics that are all closely watched.

“Alphabet’s announced dividend payouts and buybacks on top of the solid earnings beat are not only a breath of fresh air for the tech market as a whole, but also a very intelligent strategy for the search engine giant going into a tough time of the year,” said Thomas Monteiro, senior analyst at Investing.com.

Alphabet’s after-hours share surge of nearly 16% following the report increased its stock market value by about $300 billion to over $2 trillion.
In a call to discuss results, CEO Sundar Pichai touted Google’s AI offerings as a boon to its core search results. “We are encouraged that we are seeing an increase in search usage among people who are using the AI overviews,” he said.
Revenue was $80.54 billion for the quarter ended March 31, compared with estimates of $78.59 billion, according to LSEG data.

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