Alphabet jumps 10% on strong earnings, first dividend, $70 billion buyback

Alphabet jumps 10% on strong earnings, first dividend, $70 billion buyback

shares jumped 10% Friday morning after the company posted better-than-expected first-quarter results and greenlit its first dividend and a $70 billion buyback.

The company on Thursday reported revenue of $80.54 billion, a 15% increase from a year earlier and the fastest growth rate since early 2022, beating the $78.59 billion in sales expected by analysts polled by LSEG. Earnings of $1.89 per share beat the $1.51 in earnings per share expected by Wall Street.

Alphabet announced that its board authorized a dividend of 20 cents per share to be paid on June 17 to all shareholders of record as of June 10, and said it intends to pay future quarterly cash dividends. The company said the board also approved an additional $70 billion in stock repurchases.

The company exceeded analysts’ expectations for YouTube advertising revenue and Google Cloud revenue.

Barclays analysts maintained an overweight rating on Alphabet shares and raised their price target to $200 from $173, praising the company’s balancing of investments with efficiency and capital returns.

“Google is in the sweet spot of accelerating growth, expanding margins while shipping products faster and returning capital — essentially proving the naysayers wrong,” they wrote in a note Thursday. “Momentum should remain strong for a while here.”

Analysts at Oppenheimer weighed in on Alphabet’s booming advertising business despite its big spending on artificial intelligence, raising their price target to $205 from $185 and reiterating an outperform rating.

Morgan Stanley analysts, maintaining their overweight rating on Alphabet, raised their price target to $195 from $165, citing the durability of the company’s core growth and “early success in sustainably reengineering the cost base.”

Among other price target increases for the stock following Alphabet’s earnings, JPMorgan raised its price target to $200 from $165, while Evercore ISI raised its target to $200 from $160.