Alphabet Inc is planning to buy back $70 billion in stock and posted first-quarter profit and revenue above estimates as demand rose for cloud services and ad sales held up better than expected.

Investors cheered the buyback plan, sending shares of the Google parent about four percent higher in extended trading.

Excluding items, Alphabet reported earnings per share of $1.17, beating an average estimate of $1.07 per share.

“Google exceeded both revenue and earnings per share expectations this quarter, but reasons for investor optimism are modest,” says Insider Intelligence senior analyst Max Willens.

Turning a profit in cloud computing was "notable" but the reality is that Google Cloud remains comfortably behind its two most important competitors, and its growth is slowing. Sales for the unit rose to 28 percent to $7.41 billion.

Advertisers, who contribute the bulk of Alphabet's sales, have curtailed their spending in response to a shift by consumers back to in-store shopping in the wake of eased masking and other restrictions. As well, advertisers are experimenting more with new platforms like TikTok, which attracts a more youthful audience.

Alphabet for the quarter reported a slight dip in ad sales to $54.55 billion from $54.66 billion a year earlier. The decline is just the third in the company’s history since it became public in 2004 but follows a fourth-quarter drop of 3.6 percent. The company, meanwhile, has been looking to keep a tight control on costs amid recession fears and in January decided to cut about 12,000 jobs.

Alphabet’s Google unit has been scrambling to keep pace with rivals, notably Microsoft Corp, in rolling out new artificial-intelligence software that can generate long-form responses to queries and other prompts. Microsoft committed $10 billion to OpenAI whose ChatGPT software has been the talk of Silicon Valley since a free version was introduced in November.