Alphabet Inc - Ordinary Shares - Class A

Strong Financial Performance: Alphabet reported Q4 2024 consolidated revenue of $96.5 billion, up 12% YOY, driven primarily by Google Services, which grew 10% to $84.1 billion. Operating income increased 31% to $31 billion, with a margin expansion from 27.4% to 32%. Net income rose 28% to $26.5 billion, leading to a 31% increase in earnings per share (EPS) to $2.15.

Cloud Growth and Capacity Constraints: Google Cloud revenue grew 30% YOY to $12 billion in Q4, but the growth rate showed a deceleration compared to previous quarters, attributed to a lack of capacity to meet strong demand for AI products. The company noted that cloud revenue growth could have been higher with increased capacity in place, and emphasized plans to significantly increase CapEx investments to enhance infrastructure.

AI Innovation in Search: The integration of AI capabilities into Google Search, such as AI overviews and Circle to Search, is driving higher user engagement and satisfaction. Sundar Pichai highlighted that ads within AI overviews are monetizing at similar rates as traditional search ads, presenting opportunities to expand commercial viability and enhance user experience.