Alphabet Inc., the parent company of Google, has achieved a significant milestone in its financial performance, marking its first-ever $100 billion quarterly revenue. The tech giant's latest earnings report has exceeded analyst expectations, leading to a surge in its stock price.

Financial Highlights

Alphabet's impressive performance was driven by strong results across its key business segments:

YouTube and Google Cloud Exceed Expectations

Both YouTube and Google Cloud revenues surpassed Wall Street projections. Notably, Google Cloud demonstrated robust growth, with revenue increasing by 35% to reach $15.15 billion.

Cloud Business Momentum

Google Cloud has shown significant traction in the enterprise market:

• Secured deals worth over $1 billion in the first nine months of the year
• More billion-dollar deals than in the previous two years combined
• Landed a substantial $10 billion contract from Meta

AI and Other Businesses

• Gemini AI app reached 650 million monthly active users, up from 450 million in the previous quarter
• Other businesses, including life sciences and Waymo, reported increased losses of $1.42 billion

Capital Expenditure and Stock Performance

• Full-year capex guidance raised to $91-93 billion from the previous $75-85 billion range
• Shares rose 6.3% in extended trading to $292.41
• Year-to-date gains stand at 45%

This strong performance demonstrates Alphabet's continued dominance in the tech sector and its ability to capitalize on growing trends in cloud computing and artificial intelligence. However, investors should note the increased losses in other business segments and the raised capital expenditure guidance, which may impact future profitability.

Alphabet Inc., the parent company of Google, has been quietly working on a significant restructuring of its life sciences unit, Verily, for the past two and a half years. The tech giant has been meticulously separating Verily's technological infrastructure from Google's, paving the way for a potential sale or spinoff.

Transition to Independence

Heather Adkins, Google's vice president of security engineering, revealed in testimony that Verily is in the process of transitioning to Google Cloud Platform. This move is a crucial step in Verily's journey to become an independent entity outside the Alphabet umbrella. The transition marks a significant milestone in Alphabet's strategy to reshape its 'Other Bets' division, allowing these units to operate more like independent startups.

Verily's Focus and Future

Verily, known for developing software and services for health practitioners, aims to advance medical research and improve patient care. The company has been working diligently to establish its own technical and operational infrastructure, separate from Google's. This separation was finalized at the end of 2024, setting the stage for Verily's next chapter.

Alphabet's Strategic Move

While Alphabet plans to remain a significant shareholder in Verily, the restructuring will open doors for external investors to participate in the company's growth. This strategy aligns with Alphabet's broader vision of fostering innovation while allowing its subsidiaries to operate with greater autonomy.

Implications for Alphabet's Structure

Adkins' statement that Verily is no longer considered part of Alphabet's core business underscores the significance of this move. It reflects Alphabet's evolving approach to managing its diverse portfolio of companies and technologies, potentially setting a precedent for how the conglomerate might handle other units within its Other Bets division in the future.

As Alphabet continues to refine its corporate structure, the tech industry will be watching closely to see how this strategic shift impacts both Verily's growth and Alphabet's overall performance in the coming years.