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Alphabet went into its earnings report on Thursday facing concerns about the growth of its core Google ads business and the company’s ability to generate profits from its hefty investments in artificial intelligence.

For the time being at least, the company put Wall Street’s fears to rest.

Alphabet topped analysts’ estimates, reporting revenue growth of 15% for the quarter, the fastest rate of expansion since early 2022. Ad sales at YouTube jumped 20%, also beating expectations.

Questions have been swirling about the future of Google’s online ads, because the biggest revenue driver remains search, which is under pressure as new generative AI services like OpenAI’s ChatGPT offer consumers new ways to access information.

“We’re very pleased with momentum of our ads businesses,” Alphabet finance chief Ruth Porat said on Thursday’s earnings call after the report. “Search had broad-based growth.”

Alphabet shares jumped 12% in extended trading, pushing the company’s market cap past $2 trillion. Prior to the report, the stock was up 12% for the year, ahead of the Nasdaq Composite but trailing some mega-cap peers like Meta, Nvidia and Amazon.

First-quarter results showed the core advertising business is reaccelerating after a difficult 2022 and 2023, when brands reeled in spending to contend with rising interest rates and inflationary concerns. Growth is spread across the digital ad market, with Meta reporting 27% growth for the first quarter, the fastest since 2021, and Snap reporting growth of 21%, a level not seen since early 2022.

Alphabet has been on a cost-cutting spree since last year in anticipation of slower ad growth and increased spending on AI, where competition has grown rapidly in the last year. The company has also experienced a series of apparent missteps tied to the rushed launch of various AI products.

There were other reasons for skepticism ahead of Alphabet’s earnings report.

Investors turned on Meta after its first-quarter report on Wednesday, sending the stock down as much as 19% in extended trading. CEO Mark Zuckerberg opened the investor call saying he planned to spend billions of dollars investing in areas like artificial intelligence and the metaverse, even though Meta counts on advertising for 98% of its revenue.

Like Meta, Alphabet is pouring money into AI. But its investments are turning into sales.

Revenue in Google Cloud, which houses much of the company’s AI technology, jumped 28% from a year earlier to $9.57 billion, sailing past estimates. Operating income more than quadrupled to $900 million, showing that Google is finally generating substantial profits after pouring money into the business for years to keep up with Amazon Web Services and Microsoft Azure.

Last month, Alphabet announced a suite of products, including Vertex AI, a no-code console for enterprise companies to build their own AI agents.

“There were a lot of questions last year and, you know, we always felt confident and comfortable that we would be able to improve the user experience,” CEO Sundar Pichai said on Thursday’s earnings call.

Pichai said he’s seen “early confirmation” that the company can use AI to expand search’s capabilities, citing rollouts in the U.S. and the U.K. He said the company can both manage spending and monetize AI tools at the same time in the coming quarters.

To show how confident the company is in its financial position, Alphabet announced its first-ever quarterly dividend of 20 cents per share and a plan to repurchase an additional $70 billion in stock.

With first-quarter results in the rearview mirror, Alphabet now has to keep up with heightened expectations, which will only increase as competitors roll out more generative AI products. The company also only has a couple more quarters in which growth will be comparable to some of its weakest results on record.

“We’re in a new cost reality,” Prabhakar Raghavan, a senior vice president who oversees search, said at a recent all-hands meeting, urging employees to work more efficiently.

With generative AI, the company is “spending a ton more on machines,” Raghavan added, saying organic growth is slowing and the number of new devices coming into the world “is not what it used to be.”

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Elon Musk’s X temporarily down for tens of thousands of users

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Elon Musk's X temporarily down for tens of thousands of users

Elon Musk looks on as U.S. President Donald Trump meets South African President Cyril Ramaphosa in the Oval Office of the White House in Washington, D.C., U.S., May 21, 2025.

Kevin Lamarque | Reuters

The Elon Musk-owned social media platform X experienced a brief outage on Saturday morning, with tens of thousands of users reportedly unable to use the site.

About 25,000 users reported issues with the platform, according to the analytics platform Downdetector, which gathers data from users to monitor issues with various platforms.

Roughly 21,000 users reported issues just after 8:30 a.m. ET, per the analytics platform.

The issues appeared to be largely resolved by around 9:55 a.m., when about 2,000 users were reporting issues with the platform.

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X did not immediately respond to CNBC’s request for comment. Additional information on the outage was not available.

Musk, the billionaire owner of SpaceX and Tesla, acquired X, formerly known as Twitter in 2022.

The site has had a number of widespread outages since the acquisition.

The site experienced another outage in March, which Musk attributed at the time to a “massive cyberattack.”

“We get attacked every day, but this was done with a lot of resources,” Musk wrote in a post at the time.

This is breaking news. Check back for updates

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Companies turn to AI to navigate Trump tariff turbulence

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Companies turn to AI to navigate Trump tariff turbulence

Artificial intelligence robot looking at futuristic digital data display.

Yuichiro Chino | Moment | Getty Images

Businesses are turning to artificial intelligence tools to help them navigate real-world turbulence in global trade.

Several tech firms told CNBC say they’re deploying the nascent technology to visualize businesses’ global supply chains — from the materials that are used to form products, to where those goods are being shipped from — and understand how they’re affected by U.S. President Donald Trump’s reciprocal tariffs.

Last week, Salesforce said it had developed a new import specialist AI agent that can “instantly process changes for all 20,000 product categories in the U.S. customs system and then take action on them” as needed, to help navigate changes to tariff systems.

Engineers at the U.S. software giant used the Harmonized Tariff Schedule, a 4,400-page document of tariffs on goods imported to the U.S., to inform answers generated by the agent.

“The sheer pace and complexity of global tariff changes make it nearly impossible for most businesses to keep up manually,” Eric Loeb, executive vice president of government affairs at Salesforce, told CNBC. “In the past, companies might have relied on small teams of in-house experts to keep pace.”

Firms say that AI systems are enabling them to take decisions on adjustments to their global supply chains much faster.

Andrew Bell, chief product officer of supply chain management software firm Kinaxis, said that manufacturers and distributors looking to inform their response to tariffs are using his firm’s machine learning technology to assess their products and the materials that go into them, as well as external signals like news articles and macroeconomic data.

“With that information, we can start doing some of those simulations of, here is a particular part that is in your build material that has a significant tariff. If you switched to using this other part instead, what would the impact be overall?” Bell told CNBC.

‘AI’s moment to shine’

Trump’s tariffs list — which covers dozens of countries — has forced companies to rethink their supply chains and pricing, with the likes of Walmart and Nike already raising prices on some products. The U.S. imported about $3.3 trillion of goods in 2024, according to census data.

Uncertainty from the U.S. tariff measures “actually probably presents AI’s moment to shine,” Zack Kass, a futurist and former head of OpenAI’s go-to-market strategy, told CNBC’s Silvia Amaro at the Ambrosetti Forum in Italy last month.

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“If you wonder how hard things could get without AI vis-a-vis automation, and what would happen in a world where you can’t just employ a bunch of people overnight, AI presents this alternative proposal,” he added.

Nagendra Bandaru, managing partner and global head of technology services at Indian IT giant Wipro, said clients are using the company’s agentic AI solutions “to pivot supplier strategies, adjust trade lanes, and manage duty exposure dynamically as policy landscapes evolve.”

Wipro says it uses a range of AI systems — both proprietary and supplied by third parties — from large language models to traditional machine learning and computer vision techniques to inspect physical assets in cross-border transit.

‘Not a silver bullet’

While it preferred to keep company names confidential, Wipro said that firms using its AI products to navigate Trump’s tariffs range from a Fortune 500 electronics manufacturer with factories in Asia to an automotive parts supplier exporting to Europe and North America.

“AI is a powerful enabler — but not a silver bullet,” Bandaru told CNBC. “It doesn’t replace trade policy strategy, it enhances it by transforming global trade from a reactive challenge into a proactive, data-driven advantage.”

AI was already a key investment priority for global firms prior to Trump’s sweeping tariff announcements on April. Nearly three-quarters of business leaders ranked AI and generative AI in their top three technologies for investment in 2025, according to a report by Capgemini published in January.

“There are a number of ways AI can assist companies dealing with the tariffs and resulting uncertainty.  But any AI solution’s success will be predicated on the quality of the data it has access to,” Ajay Agarwal, partner at Bain Capital Ventures, told CNBC.

The venture capitalist said that one of his portfolio companies, FourKites, uses supply chain network data with AI to help firms understand the logistics impacts of adjusting suppliers due to tariffs.

“They are working with a number of Fortune 500 companies to leverage their agents for freight and ocean to provide this level of visibility and intelligence,” Agarwal said.

“Switching suppliers may reduce tariffs costs, but might increase lead times and transportation costs,” he added. “In addition, the volatility of the tariffs [has] severely impacted the rates and capacity available in both the ocean and the domestic freight networks.”

WATCH: Former OpenAI exec says tariffs ‘present AI’s moment to shine’

Former OpenAI exec says tariffs 'present AI's moment to shine'

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Amazon’s Zoox robotaxi unit issues second software recall in a month after San Francisco crash

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Amazon's Zoox robotaxi unit issues second software recall in a month after San Francisco crash

A Zoox autonomous robotaxi in San Francisco, California, US, on Wednesday, Dec. 4, 2024.

David Paul Morris | Bloomberg | Getty Images

Amazon‘s Zoox robotaxi unit issued a voluntary recall of its software for the second time in a month following a recent crash in San Francisco.

On May 8, an unoccupied Zoox robotaxi was turning at low speed when it was struck by an electric scooter rider after braking to yield at an intersection. The person on the scooter declined medical attention after sustaining minor injuries as a result of the collision, Zoox said.

“The Zoox vehicle was stopped at the time of contact,” the company said in a blog post. “The e-scooterist fell to the ground directly next to the vehicle. The robotaxi then began to move and stopped after completing the turn, but did not make further contact with the e-scooterist.”

Zoox said it submitted a voluntary software recall report to the National Highway Traffic Safety Administration on Thursday.

A Zoox spokesperson said the notice should be published on the NHTSA website early next week. The recall affected 270 vehicles, the spokesperson said.

The NHTSA said in a statement it had received the recall notice and that the agency “advises road users to be cautious in the vicinity of vehicles because drivers may incorrectly predict the travel path of a cyclist or scooter rider or come to an unexpected stop.”

If an autonomous vehicle continues to move after contact with any nearby vulnerable road user, it risks causing harm or further harm. In the AV industry, General Motors-backed Cruise exited the robotaxi business after a collision in which one of its vehicles injured a pedestrian who had been struck by a human-driven car and was then rolled over by the Cruise AV.

Zoox’s May incident comes roughly two weeks after the company announced a separate voluntary software recall following a recent Las Vegas crash. In that incident, an unoccupied Zoox robotaxi collided with a passenger vehicle, resulting in minor damage to both vehicles.

The company issued a software recall for 270 of its robotaxis in order to address a defect with its automated driving system that could cause it to inaccurately predict the movement of another car, increasing the “risk of a crash.”

Amazon acquired Zoox in 2020 for more than $1 billion, announcing at the time that the deal would help bring the self-driving technology company’s “vision for autonomous ride-hailing to reality.”

While Zoox is in a testing and development stage with its AVs on public roads in the U.S., Alphabet’s Waymo is already operating commercial, driverless ride-hailing services in Phoenix, San Francisco, Los Angeles and Austin, Texas, and is ramping up in Atlanta.

Tesla is promising it will launch its long-delayed robotaxis in Austin next month, and, if all goes well, plans to expand after that to San Francisco, Los Angeles and San Antonio, Texas.

— CNBC’s Lora Kolodny contributed to this report.

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Tesla's decade-long journey to robotaxis

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