Alphabet Value Surges Over $2tn On Dividend Plan

The market value of Google parent Alphabet crossed to more than $2 trillion (£1.6tn) in Friday trading after the company announced its first-ever cash dividend along with revenue and earnings growth that beat analysts’ estimates.

The cash dividend programme of 20 cents per share is worth nearly $2.5bn and was supplemented by stock repurchases worth an additional $70bn.

The policy shift marks the first time Alphabet has shared its vast cash reserves with investors, rather than hoarding them for investments or acquisitions, following a similar move by Meta earlier this year.

Alphabet’s revenues rose 15 percent in the first quarter to $80.5bn from $69.8bn the previous year, beating analysts’ estimates of $79bn.

AI plans

The firm’s net income rose 57 percent year-on-year to $23.7bn, compared to analysts’ predictions of $19.1bn.

Alphabet’s share price rose roughly 10 percent in Friday trading, giving it a market capitalisation of $2.15tn.

Meanwhile Microsoft’s stock price leapt roughly 7 percent to just over $3tn on Friday after the firm reported strong profit and revenue increases driven by its heavy investments into artificial intelligence, notably its more than $10bn deal with OpenAI.

“Our results in the first quarter reflect strong performance from Search, YouTube and Cloud,” said Alphabet and Google chief executive Sundar Pichai in a statement.

“Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation.”

‘Gemini era’

Pichai emphasised that the company is “well under way with our Gemini era”, referring to Google’s generative AI, Gemini, saying the firm has clear pathways toward monetisation of the technology through advertising, cloud and subscriptions.

Google has been seen as playing catch-up to Microsoft, which has been quick to integrate technology from partner OpenAI across its range of products, even building a “Copilot” AI key into the Microsoft Keyboard.

AI is seen as potentially eroding Google’s core search business by changing the way users seek out information.

The strong approval of investors to Alphabet’s AI rhetoric stood in contrast to plans for heavy AI expenditure announced last week by Facebook parent Meta, which saw the social media firm’s shares plunge 11 percent.