Alphabet revenue unexpectedly rises in first quarter amid industry slowdown

Alphabet stocks rose in after-hours trading on Tuesday after the tech firm beat analyst expectations for first-quarter earnings, marking an unexpectedly bright spot in the otherwise struggling tech sector.

The company reported first-quarter revenue of $69.8bn, up 3% year-over-year and above analyst predictions of $68.9bn. Its cloud business reported a profit for the first time since its launch, taking in $191m.

While in previous earnings reports Alphabet fared better than some of its peers such as Meta and Twitter, it had stumbled in recent months, announcing in August it would freeze hiring. In January it cut more than 12,000 jobs, or 6% of its global workforce, and a leaked internal memo in March revealed Alphabet would be cutting back on some employee perks in an effort to save money.

YouTube ad revenue was down 2.6% in the quarter, but at $6.69bn still beat the $6.64bn expected by analysts. The company is continuing to invest in short-form video to compete with TikTok, and Pichai stated in the call on Tuesday that YouTube Shorts now has 50bn daily views, up from 30bn this time last year.

The rare beat comes as the tech sector continues to hobble through a downturn. All eyes will be on ongoing earnings reports, with Meta set to release its own on Wednesday and Apple reporting on Thursday.