January 28, 2023

Alphabet, the parent company of Google, earned what it took a year until recently in just three months. This is a level of growth that companies of this size seldom or never achieve, but the pandemic has lifted all boundaries for tech companies.

The search and advertising company reported record earnings and sales for the second quarter on Tuesday, confirming the excitement of investors, who have doubled their value on the stock market since early last year. The excellent results drove aftermarket stocks up modestly.

Alphabet posted earnings of $ 18.5 billion, or $ 27.26 per share, for the quarter. In 2015 he was still doing less all year round. Analysts didn’t see it coming and estimated the company would make an average of just $ 19.14 per share of profits. Even the most optimistic analyst is forecasting only $ 24.43.

Sundar Pichai, Google’s chief executive, attributes the results to “an increasing tide of online activity.” Revenue rose 62 percent year over year to $ 61.88 billion, an increase that has not been seen since the company grew rapidly in 2005 when it was a start-up.

With a market cap of nearly $ 2 trillion, Alphabet is as far removed from a start-up as possible. Like Amazon and Facebook, it is often criticized for exercising its power unfairly, which companies deny. Bills in the US House of Representatives would restrict the big tech companies, and President Biden has appointed critics of big tech to important regulatory positions.

The pandemic profits that companies are generating are likely only to amplify calls to action.

“Regulators are probably the biggest potential barrier to Alphabet right now,” said Dave Heger, communications analyst at brokerage firm Edward Jones. “But antitrust lawsuits will take years. In the meantime, the company will continue to grow and add value to advertisers. The story is probably in his favor. “

Alphabet, like the other big tech companies that offer tools to communicate, shop, entertain, and work remotely, was initially seen as vulnerable to the pandemic. In the second quarter of 2020, the first full quarter that the virus was rampant, Alphabet’s revenue declined slightly as advertisers recalibrated. But it wasn’t down much and it didn’t take.

When advertisers realized that the world was not going to end, they came back in force. This not only helped the main Google search engine but also helped the YouTube video department. YouTube advertising revenue rose 84 percent in the second quarter from the same period in 2020. In a conference call Tuesday, Google executives spoke about how the pandemic has made YouTube more of an e-commerce site.

The cloud storage business, in which Alphabet is a long-runner, also did well for Amazon and Microsoft: Sales rose by 50 percent and losses slowed.

The growth took a few more workers. Alphabet hired more than 16,000 people last year for a total of 144,000.