Alphabet Inc. beats earnings expectations as cloud growth offsets YouTube slowdown

Google parent company reports strong revenue growth from Google Cloud and YouTube Shorts

Alphabet Inc., the parent company of Google, reported better-than-expected earnings for the fourth quarter of 2022, as strong growth in Google Cloud and YouTube Shorts offset a slowdown in YouTube ad revenue.

The company reported earnings per share of $1.53, beating analyst estimates of $1.28, on revenue of $76.05 billion, which was also above expectations. Google Cloud revenue grew by 33% year-over-year to $7.32 billion, while YouTube ad revenue grew by 4% to $8.63 billion.

The growth in Google Cloud was driven by strong demand for the company's infrastructure and platform services, particularly from the financial services, retail, and healthcare sectors. YouTube Shorts, a short-form video platform similar to TikTok, also saw strong growth, with monthly active users increasing by 50% year-over-year to 1.5 billion.

However, YouTube ad revenue growth slowed down in the quarter, as advertisers tightened their spending amid economic uncertainty. YouTube ad revenue grew by only 4% year-over-year to $8.63 billion, compared to 8% growth in the previous quarter.

Overall, Alphabet Inc.'s earnings report was positive, as the company continues to benefit from the growth of its cloud and short-form video businesses. However, the slowdown in YouTube ad revenue is a concern, and it remains to be seen how the company will respond to the challenges of the current economic environment.