Google, one of the world’s largest technology companies, has officially reached the $2 trillion market cap milestone, solidifying its position among the most valuable companies globally. This achievement comes after a year of significant challenges, including the rapid rise of generative AI and increasing regulatory scrutiny. The impact of AI has been particularly profound, driving Google to make substantial changes to its search engine, restructure key teams, and launch its own Gemini AI model.
Google’s executive team took decisive steps to navigate these challenges, including project cuts and employee layoffs. Yesterday, the company announced its first-ever dividend and a $70 billion share buyback as part of its Q1 2024 earnings report, indicating a strategic approach to maintaining investor confidence.
Investors have responded positively to Google’s recent moves, with its parent company, Alphabet, maintaining a $2 trillion market cap for an entire trading day, a significant achievement after briefly hitting this mark in November 2021. With this milestone, Google is now the fourth most valuable public company globally, trailing only Nvidia ($2.2 trillion), Apple ($2.6 trillion), and Microsoft ($3.0 trillion). Amazon currently sits at $1.8 trillion, and Meta at $1.1 trillion.
Despite Meta’s recent stock price drop after CEO Mark Zuckerberg mentioned long-term investments in generative AI, Google seems to be finding quicker routes to monetization. It has already begun helping advertisers target audiences using AI with its Performance Max tool, indicating that 63 percent of those advertisers are more likely to launch campaigns with “good or excellent” ad strength.
Google’s existing businesses are also holding steady. According to its Q1 2024 earnings report, the company generated $80.5 billion in revenue and $23.7 billion in profit, reflecting a 15 percent increase in revenue year over year and a 14 percent boost in profit compared to the previous quarter. These figures suggest Google’s foundational revenue sources—such as search and advertising—remain robust.
Furthermore, layoffs may have slowed or paused. While the company spent $700 million on layoffs in January, the new Q1 report reveals that total spending on “severance and related charges” across January, February, and March amounted to $716 million, indicating a possible shift in staffing strategies.
Google’s revenue growth appears to be well-distributed across multiple segments. Search and advertising revenue were up 14 percent year over year, YouTube ads rose by nearly 21 percent, and “subscriptions, platforms, and devices” grew by 18 percent year over year, largely due to premium YouTube subscriptions. Google’s chief business officer, Philipp Schindler, also mentioned a significant increase in YouTube Shorts content and a 12 percent boost in Shorts monetization in the last quarter alone.
Google will further outline its future directions during its annual developer conference, Google I/O, scheduled for May 14th. This event may provide additional insights into the company’s strategies in AI and other emerging technologies.
For more details, you can read the original report on The Verge.