SAN FRANCISCO (AFP)

Google parent Alphabet reported its first-ever $100 billion quarterly revenue on Wednesday, powered by strong growth across its core search business and rapidly expanding cloud division that was buoyed by artificial intelligence.

The tech giant's revenues jumped 16 percent year-on-year to $102.3 billion in the third quarter, beating analyst expectations and marking a milestone for the company founded by Larry Page and Sergey Brin in 1998.

Shares of the company rose 6% in extended trading.

The cloud services and AI giant raised its capital expenditure forecast for the year to between $91 billion and $93 billion, compared with the estimates of $80.67 billion.

Google Cloud remained one of Alphabet's fastest-growing segments, benefiting from surging enterprise demand for AI-powered infrastructure and data analytics services.

The unit posted revenue of $15.16 billion, topping estimates of $14.72 billion. The performance was likely boosted by burgeoning enterprise demand for its AI infrastructure.

The unit continues to close the gap with larger rivals Microsoft Azure and Amazon Web Services, aided by strong take-up of Vertex AI and custom Tensor Processing Units.

Competition in the broader AI and cloud market is intensifying, with rivals aggressively cutting prices and introducing new generative-AI capabilities.

Alphabet's advertising unit, which brings is the vast majority of the company's revenue, has been competing in a crowded field of rivals vying for more ad dollars as lower interest rates are expected to lift the economy.

However, analysts have pointed to cautious spending from advertisers in some sectors grappling with economic uncertainty due to pressures from tariff costs and a rapidly evolving global trading landscape.

Still, Wall Street expects the company to benefit from advertisers moving away from experimental ad platforms like Snapchat and others.

The results come just days after Microsoft and SoftBank Group-backed OpenAI unveiled "Atlas," an AI-powered browser aimed at directly competing with Google's core search engine and browser stack.

The launch represents one of the most significant challenges to Google's search dominance in years, and will be a key focus for investors listening for management's response to the rising competitive threat to its most lucrative business.