Alphabet Inches Closer to $1 Trillion Market Cap After Strong Earnings at Google

Shares in Google’s parent Alphabet rose as much as 5% in after-hours trading Monday as the company reported earnings that were well ahead of Wall Street expectations, thanks in part to growth in Google’s cloud business.

Investors welcomed the news enough to push Alphabet’s stock up to an all-time high of $1,265 a share late Monday, valuing the stock at around $875 million. Alphabet is one of three companies that could become the first in the world with a $1 trillion market cap. The others: Apple (valued at $940 billion) and Amazon ($880 billion).

Alphabet said its total revenue rose 26% to $32.7 billion in the second quarter. Factoring out traffic-acquisition costs, revenue totaled $26.2 billion, above the $25.6 billion analysts had expected.

As expected, the company’s net income was hurt by a record $5 billion antitrust fine imposed by the European Commission. Alphabet reported earnings of $4.54 a share in the quarter. Without the fine, net income would have been $11.75 a share.

Revenue growth has accelerated from the 21% rate of a year ago, thanks in part to an increase in the number of paid clicks, which rose 58% from the year-ago quarter. The amount paid per click, meanwhile, fell 22%.

Areas outside of Google’s core ad business saw the strongest growth. So-called “other revenue”—which includes revenue from Google’s cloud as well as devices like the Pixel phone and the Home speaker—rose 37% to $4.4 billion, or about 14% of its total revenue. “Other bets,” such as Waymo and Fiber, saw revenue rise 49% but only totaled $145 million in the quarter.

Areas such as cloud computing and “other bets” have also added to Google’s spending. Google’s capital expenditures doubled to $5.48 billion from the year-ago quarter, while the operating loss at its “other bets” segment grew to $732 million from $633 million.