Alphabet shares, which closed up 1.8% on Tuesday, were up 4% in after-hours trading. The stock has risen nearly 22% this year, in line with the broader market.

Alphabet also beat profit expectations with earnings of US$2.12 per share, compared with an average market estimate of US$1.85, according to LSEG.

CEO Sundar Pichai said in a statement that investments in AI were “paying off” through the use of and sales in its Search and Cloud businesses.

Google’s dominant position in the digital advertising market has helped attract marketing dollars even as social media platforms such as Instagram and TikTok and ad services offered by the likes of Amazon.com make big inroads with marketers.

The healthy ad sales numbers from Google also suggest that the online advertising market remains strong, thanks to increased political spending ahead of the US presidential election, as well as big-ticket events such as the 2024 Paris Olympics which ended in August.

YouTube’s revenue surpassed US$50 billion over the past four quarters, he said. Ad sales for the video streaming service rose 12% to US$8.92 billion.

Digital advertising sales – the biggest chunk of Alphabet’s total revenue – rose to US$65.85 billion from US$59.65 billion.

Revenue from Google’s cloud platform grew 35% to US$11.35 billion, beating analysts’ estimate of US$10.86 billion.

This business, though a small portion of Alphabet’s revenue, has been growing rapidly as enterprises double down on cloud spending which is essential to power artificial intelligence technologies.

Revenue increased 15% to US$88.27 billion in the July-September period, while analysts on average expected US$86.30 billion, according to LSEG data.