Why Alphabet Stock Is Rising Today

Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) stock is closing out the week's trading with another round of solid gains. The company's share price was up 1.6% as of 3:20 p.m. ET Friday and had been up as much as 4.3% earlier in the session.

Alphabet published its first-quarter results after the market closed yesterday and delivered sales and earnings for the period that came in ahead of the average Wall Street targets. The business posted non-GAAP (adjusted) earnings per share of $2.81 on sales of $90.23 billion, topping the average analyst estimate's call for per share earnings of $2.01 on revenue of $89.15 billion.

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Alphabet stock rises on strong Q1 results

Alphabet reported a substantial sales beat in the first quarter, with stronger-than-expected performance for the advertising business helping to offset a small shortfall in sales from the company's Google Cloud infrastructure services business. Artificial intelligence (AI) services helped push ads revenue up to $66.8 billion, topping Wall Street's call for sales of $66.4 billion. And despite sales of $12.26 billion for Google Cloud falling slightly short of Wall Street's forecast, the unit still grew 28% year over year in the period. Alphabet's beat on profitability was even more impressive.

What's next for Alphabet?

Along with strong first-quarter results, Alphabet's management delivered reassurances that the company's business can continue to be resilient in the face of macroeconomic challenges and regulatory pressures that might eventually result in some of its business units being spun off. The company's big first-quarter earnings beat delivered encouraging signs of operational efficiency. With sales performance for the period also coming in significantly better than anticipated, Alphabet is showing that its growth engine remains strong and is seeing tangible benefits from AI.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.