Alphabet leads strong start to US tech earnings

Alphabet (US:GOOG) earnings marked a good start to a week where investors will be looking towards the big tech companies to see if the billions of dollars of investment in artificial intelligence (AI) is starting to generate profit.

On Tuesday, Alphabet’s share price jumped after its cloud computing revenue came in ahead of expectations. In the three months to September, Google cloud revenues were up 35 per cent year on year to $11.4bn (£8.8bn) led by “accelerated growth” across its AI products. This was ahead of the $10.9bn consensus forecast, as compiled by FactSet.

It wasn’t just cloud computing that beat expectations. Across Alphabet’s businesses, revenue rose by 15 per cent to $88.3bn, which was ahead of the $86.4bn consensus forecast. Meanwhile, its cost-cutting programme is having an effect, with the operating margin expanding by four percentage points to 32 per cent.