Alphabet (GOOGL.O) made history on Thursday by declaring its inaugural dividend and announcing a $70 billion stock repurchase program, triggering a nearly 16% surge in its stock price after market close. The parent company of Google is giving back to shareholders while investing heavily in data centers to keep pace with competitors in the field of artificial intelligence. The dividend will amount to 20 cents per share. Just three months ago, Alphabet’s tech counterpart, Meta Platforms (META.O), revealed its own maiden dividend, resulting in a staggering $196 billion increase in the social media company’s market capitalization the following day.
The firm’s strong first-quarter revenue performance was fueled by heightened demand for its cloud services, driven by the growing adoption of artificial intelligence, alongside consistent advertising expenditure. Alphabet is rebounding from a previous quarter where advertising sales fell short of expectations, leading to a decline in shares, amidst intensified competition from Amazon.com (AMZN.O), Facebook (META.O), and emerging platforms like TikTok.
Google’s AI-powered chatbot, Gemini, has been promoted as a solution for automation across various tasks, although it has faced criticism for generating historically inaccurate images, including depictions of former U.S. leaders and World War Two-era German soldiers. Google has acknowledged these issues and is actively working to address them.
