Alphabet, the parent company of Google, announced its third-quarter financial results on Wednesday, showing strong growth in its core advertising business and cloud computing division, marking its first quarter with revenue exceeding $100 billion. Despite the company's announcement of spending billions more than previously expected, investors remained excited, and the stock price rose in after-hours trading.

Alphabet raised its capital expenditure outlook for the next year, expecting to invest between $91 billion and $93 billion, almost entirely for infrastructure construction, such as data centers, to support increasingly important artificial intelligence products. This forecast represents a significant increase from the $75 billion in February and the revised $85 billion in July.

In the third quarter, Alphabet's total revenue reached $102.35 billion, surpassing analysts' average expectation of $99.89 billion. Google Cloud remained one of Alphabet's fastest-growing divisions, benefiting from strong demand for AI-driven infrastructure and data analytics services from enterprises. The third-quarter revenue for Google Cloud was $15.16 billion, higher than the analyst expectation of $14.72 billion. As companies increase their use of Vertex AI and custom tensor processing units, Google Cloud is gradually narrowing the gap with competitors Microsoft Azure and Amazon Web Services.

However, Alphabet faces intense competition in its advertising business, especially as economic downturns could lead to cautious ad spending. Nevertheless, analysts believe that many advertisers may shift from some experimental ad platforms to Google to seek more reliable returns on investment.

Notably, just days after Alphabet released its earnings report, Microsoft and OpenAI jointly launched the AI-powered Atlas browser, directly competing with Google's core search engine and Chrome browser. This launch is seen as one of the most significant challenges to Google's dominance in the search market in years, and investors are watching how the company's management responds to this competitive threat.

Key Points:

- 📈 Alphabet achieved its first $100 billion quarterly revenue in the third quarter, reaching $102.35 billion.

- 💻 Google Cloud continued strong growth, with third-quarter revenue of $15.16 billion, exceeding market expectations.

- 🔍 The newly launched AI browser Atlas poses a direct challenge to Google's search engine, drawing widespread market attention.