The stock of Google parent company Alphabet Inc. (NASDAQ:GOOGL) is up 4% in pre-market trading after the company said its first-quarter revenue came in at $45.6 billion U.S., blowing past Wall Street estimates.
Alphabet also announced plans to buyback $50 billion U.S. of Google shares, a move that is being cheered by investors. Google‘s results showed a surge in advertisement sales related to travel and retail, showing that businesses are boosting digital marketing to reach a public that is eager to resume normal life.
COVID-19 restrictions have limited travel and trips to physical stores, two key areas of Google’s search business. However, Alphabet shares are up more than 30% this year on optimism vaccinations in the U.S. are reviving these activities.
While most major technology companies thrived during the pandemic, Alphabet’s performance was uneven. YouTube ad revenue boomed as people were stuck at home looking to relieve boredom by watching videos online.
Google’s cloud-computing business also grew quickly on a spike in demand for internet-based services from remote workers. However, the online search engine dwarfs these other operations and it suffered from a slump in commercial queries for things such as flights and hotels.
Now, with more than one billion COVID-19 vaccines distributed, consumers have started to venture out to restaurants, retail stores and vacation destinations -- and they often interact with Google services and ads before they do.
Alphabet’s board authorized the company to repurchase up to an additional $50 billion U.S. of its Class C capital stock.
Chief Executive Officer Sundar Pichai is trying to expand beyond the advertising engine that generates most of Alphabet’s revenue, while contending with a regulatory backlash that includes three government anti-trust suits targeting different parts of its business in the U.S.
Overall Alphabet generated $17.9 billion U.S. of net income, or $26.29 U.S. a share, in the first quarter, compared with $6.8 billion U.S., or $9.87 U.S. a share, a year earlier.
