Google parent Alphabet Inc’s quarterly revenue and profit surged to record highs, the company reported on Tuesday, powered by a rise in advertising spending as more consumers shopped online.
Shares of Alphabet, the world’s largest provider of search and video ads, rose 3.3% in extended trading after the results, which handily beat analyst estimates. Shares of Facebook, which competes with Google in web ad sales and reports its own results on Wednesday, rose 1.3%.
Overall, it was a stellar day for the big U.S. tech companies – Apple and Microsoft also reported record earnings.
With consumers spending more time online during the coronavirus pandemic, retailers have been pushing to reach them there, whether they’re shopping for products using Google search or watching videos on YouTube. The nascent U.S. economic rebound that’s accompanied the vaccine rollout and the easing of restrictions is also helping as consumers are enjoying increased mobility and options for purchases of all kinds.
“Alphabet has benefited from the general return of ad spend to the market and especially the balance of that return, which is more focused on digital channels than pre-pandemic,” said Tom Johnson, chief digital officer at WPP Mindshare.
Alphabet said revenue from Google advertising rose nearly 70% to $50.44 billion during the second quarter ended June 30.