Alphabet had its best day since July 2015 and saw its market cap rise more than $75 billion to reach $864.5 billion on Friday.
Google's parent company on Thursday reported earnings per share of $14.21, excluding items, compared with analysts' expectations of $11.30 per share in a Refinitiv survey. Revenue came in at $38.94 billion, according to Alphabet, beating Refinitiv estimates of $38.15 billion.
Google's traffic acquisition costs were also lower than analysts had been hoping for, a positive sign on a closely watched metric. TAC represents the payments Google makes to companies like Apple for its search engine to be the default on their devices. Google reported TAC of $7.24 billion compared with StreetAccount estimates of $7.27 billion.
The company saw strong growth in its cloud business, lead by newly installed boss Thomas Kurian. Kurian is in charge of growing Google Cloud to rival Amazon Web Services and Microsoft Azure and has already made some big acquisitions like analytics company Looker.
Google's other revenue, which CFO Ruth Porat said is mostly from cloud revenue, came in at $6.18 billion, up from $4.43 billion during last year's quarter. CEO Sundar Pichai told analysts on the earnings call that the cloud unit reached $8 billion in annualized revenue and plans to triple its sales force over the next few years.
While Porat partially blamed YouTube last quarter for deceleration in Google's revenue growth, this quarter she said its revenue was strong.
"YouTube was again the second largest contributor of revenue growth, and [we're] really pleased with the ongoing momentum that we're seeing here," Porat said, although Google does not break out numbers for YouTube.