Google parent company Alphabet joined a handful of rival tech giants paying dividends, announcing its first-ever planned payout during its latest quarterly results, which were driven by momentum in search and plans to be even more dominant in AI.
The $0.20 cash dividend will be paid June 17 to shareholders of record as of June 10 for all three classes of company shares A, B and C. The search giant also authorized $70 billion in new share repurchases. The company is sitting on $108 billion in cash.
"We've had a share repurchase program for quite some time that we've been growing over the years. And we felt, as I said, that this further strengthens our overall capital return program. You know, to be clear, I've talked about the capital allocation framework for quite some time, and it does remain the same", Ruth Porat, Google President and Chief Investment Officer told FOX Business' Susan Li.
Porat was most recently CFO, and a search remains underway for her replacement in that role.
Shares rallied in after-hours trading, sending the market value past $2 trillion and adding to the 11% run-up this year.
CEO Sundar Pichai doubled down on the company's commitment to advancing AI throughout its businesses after revenue topped $80 billion, up 15% from a year ago, and profits jumped 61% to $1.89 per share.
ORACLE WILL RELOCATE HEADQUARTERS TO NEW CITY
"It was a great quarter led by strong performance from Search, YouTube and Cloud. Today, I want to share how we are thinking about the business and the opportunity more broadly. Of course, that's heavily focused on AI and search" Sundar Pichai, Google CEO, told investors on the earnings conference call.
Sundar recently made headlines for firing a group of workers who staged anti-Israel protests that led to protests for other causes in the office. In a detailed memo, he said such acts would not be tolerated in the workplace.
GOOGLE FIRES WORKERS WHO PROTESTED IN THE OFFICE
Mark Zuckerberg's Meta, which is also in the AI race, initiated a $0.50 cent dividend earlier this year, which was paid March 26. Facebook's parent company reported results Wednesday, Zuckerberg warned heavy AI spending may take a while to pay off.
"As we’re scaling CapEx and energy expenses for AI, we’ll continue focusing on operating the rest of our company efficiently, but, realistically, even with shifting many of our existing resources to focus on AI, we’ll still grow our investment envelope meaningfully before we make much revenue from some of these products," he told analysts and investors tuned into the call.
Shares tumbled 10.56%, the worst session since Oct. 27, 2022. Shares have still gained over 24% this year.
Other tech giants paying dividends include Apple and Microsoft. Amazon remains the holdout.
