Tech Giants Alphabet and Amazon Extend Earnings Boom Inc. and Google parent Alphabet Inc. reported booming quarterly sales and profits, showing that the tech giants continue to extend their dominance and shuck off concerns that might have dampened growth.

Alphabet on Thursday said net profit in the latest period grew 29%, with no indications yet of an impact from a backlash that began late in the quarter from advertisers worried about their brands appearing near objectionable content online.

Amazon, meanwhile, said first-quarter profit jumped 41%, marking its eighth straight quarter in the black, even as it continues to pour investment into expansion in new areas. Amazon's longest earnings streak since 2012 affirmed confidence among investors -- who had already driven its shares up 53% in the past year -- that Amazon has turned into a profit machine as well as a growth machine.

Alphabet Chief Financial Officer Ruth Porat said success in its core operations is helping it expand in other areas. "The strong performance in our advertising business allows us to take bigger bets within Google to fuel the growth of additional revenue streams," she said.

Strong results from Microsoft Corp. and Intel Corp. provided further evidence that technology's juggernauts have nurtured businesses they helped found, such as cloud computing, e-commerce and online advertising, into full industries.

Still, the industry is entering a time period of heavier investments as autonomous vehicles, drones and robots take off, which analysts warn could consume more capital resources. And the increasingly prominent position the tech giants occupy in society as well as in business exposes them to new kinds of risks, such as the broadcasting of violent episodes on Facebook Inc.'s live video tool.

A fuller picture of the tech industry's health will come next week when Apple Inc. and Facebook report quarterly results.

Amazon and Alphabet's stocks hit new highs in after-hours trading. The boost to Alphabet's market cap was about $25 billion -- equivalent to the value of Snap Inc., the parent company of Snapchat, the mobile messaging service that went public last month.

"They're becoming bigger and bigger and their growth rates are unchanged, " said RBC Capital Markets analyst Mark Mahaney, noting that Alphabet has increased revenue in its core segment by at least 20% every quarter for seven straight years and Amazon has done the same for over four years.

Google credited its growth to the strength of its advertising business on mobile phones and on its YouTube video site. It seemed to avert a crisis when advertisers discovered in recent weeks that their brands appeared alongside offensive content on YouTube. Major companies including Coca-Cola Co. and Wal-Mart Stores Inc. pulled their ad spending from Google except for targeted search ads. That boycott didn't dent Google's growth: Advertising revenue jumped 19% in the first quarter to $21.4 billion.

Sundar Pichai, chief executive of Google, said the company had done "thousands and thousands of calls" with advertisers to address the issue, pointing to new "safeguards" to address their concerns. The impact of the protest could be felt more in the second quarter, if it picks up steam.

In recent years, Google's growth engine has shifted from its traditional search advertising on desktop computers to mobile advertising, YouTube and automated ad-buying systems. The number of paid clicks on Google's ads soared 44% in the first quarter compared with the year-ago period, benefiting from rising mobile-first internet usage.

Google has come to dominate the online advertising market along with Facebook. The digital giants accounted for an estimated 77% of the U.S. online advertising market in 2016, up from 72% the year before, said Pivotal Research analyst Brian Wieser, analyzing data published by the Interactive Advertising Bureau.

Google and Facebook captured 99% of the online ad industry's revenue growth in 2016, estimated Mr. Wieser. On balance the rest of the industry was flat.

The question plaguing Amazon was whether the online retail giant could sustain its growth despite substantial spending on everything from international expansion to video content. Amazon has long plowed most of its revenue back into product development and operations, including massive warehouses to speed products to customers. In recent periods Amazon has shown some spending discipline while it expands its operations overseas, bolsters its shipping infrastructure and broadens its library of movies and shows.

Analysts expect the phase to last at least through mid-2018, in part due to Amazon's promise to hire 130,000 U.S. workers during that time frame.

A big piece of that spending is coming in international markets like Mexico and India, where the company is building out its Prime offerings and competing against heavily entrenched incumbents. The international business has been stuck in the red in recent quarters. That remained the case in the first quarter, as the division reported an operating loss of $481 million. Sales increased 15.6% to $11.06 billion.

Amazon's financial chief, Brian Olsavsky, said the company is boosting investments in a number of areas, including in video content, its Echo personal-assistant speakers and its Prime subscription program. Amazon is also investing heavily in warehouses due to strong growth for its business fulfilling orders for sellers on its site.

"We're continuing to look for things that customers love, that can grow to be large, that we think will provide strong financial returns in the long run, and that also can last for decades," Mr. Olsavsky said.

One of those areas is transportation. The retail giant has also started laying the groundwork for its own shipping business to add capacity for itself, with the grander ambition of one day hauling and delivering packages for itself, other retailers and consumers, according to people familiar with the matter.

In the first quarter, Amazon said it is building its first air hub in Kentucky. It is also planning to add airfreight capacity for Chinese customers. The company is leasing up to 40 planes, with 18 planes currently in service, and has more than 4,000 dedicated truck trailer hitches as it aims to move more of its goods itself. And it has rolled out delivery in as little as an hour to more than 45 cities across eight countries.

Shipping costs rose 34% in the first quarter to $4.38 billion, a lower rate compared with a year ago. "The ability to control shipments within our network has gone up and we think the cost is very good," Mr. Olsavsky said.

Analysts flagged one concern for Amazon in the quarter: Growth in the company's all-important Amazon Web Services division continued to shrink. The decade-old cloud-services operation, which rents computing power to a variety of startups, government agencies and other corporations, has become a major factor in Amazon's recent streak of profitability.

The division is facing tougher competition from Microsoft and Google, prompting concerns about whether the growth can continue on pace -- especially amid price wars.

Microsoft's Azure cloud-computing business again posted torrid growth on Thursday as corporate customers adopt the service to handle larger pieces of their computing operations. Office 365, the online version of Microsoft's widely used productivity software, reported huge gains as well, as businesses increasingly subscribe to email, word-processing and spreadsheet applications that run in Microsoft's data centers.

Intel posted an increase in first-quarter profit, helped by an uptick in PC demand. CEO Brian Krzanich said selling price strength across nearly every segment of the business in the quarter "demonstrates continued demand for high-performance computing, which will only increase with the explosion of data."

--Jay Greene and Ted Greenwald contributed to this article.

Write to Rolfe Winkler at and Laura Stevens at

(END) Dow Jones Newswires

April 27, 2017 20:17 ET (00:17 GMT)