Alphabet, the parent company of Google and YouTube, reported its first-quarter earnings Thursday after the market close, exceeding initial revenue estimates and sending shares up by more than 4% in after-hours trading.

Google CEO Sundar Pichai said in a statement that the company's "strong Q1 results, which reflect healthy growth and momentum across the business," reflect its "unique full stack approach to AI."

"This quarter was super exciting as we rolled out Gemini 2.5 , our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation," said Pichai in the earnings report. "Search saw continued strong growth, boosted by the engagement we're seeing with features like AI Overviews , which now has 1.5 billion users per month."

Alphabet Inc. , comprised of Google and a collective of companies called Other Bets, held a call with investors following the earnings report.

During the earnings call with investors, Philipp Schindler, Google's chief business officer, said that AI Overviews could become a major revenue driver.

"Q1 marked our largest expansion to date for AI overviews, both in terms of launching to new users and providing responses for more questions," said Schindler.

"For AI overviews, overall, we continue to see monetization at approximately the same rate, which gives us a strong base in which we can innovate even more," he added.

Anat Ashkenazi, chief financial officer of Alphabet, said that most of the $17.2 billion in capital expenditure for the quarter went into technical infrastructures "with the largest component being investment in servers, followed by data centers" to support growth across Google services, Google Cloud, and Google DeepMind.

On top of that, Ashkenazi confirmed that Alphabet is still committed to investing $75 billion over the course of the year in AI, despite possible headwinds like tariffs that could hit advertisement revenue.

Thomas Monteiro, senior analyst at Investing.com, said in a note that Alphabet has "delivered a sound response to those questioning the solidity of the search business" amid increasing AI demand.

"When you combine the numbers seen today with Alphabet's also solid cloud performance, it leaves few doubts about the company's leading position in the AI search revolution," said Monteiro.