Google has officially crossed the $2 trillion mark in market capitalization, a landmark achievement indicating its ongoing strength and resilience in the face of significant challenges. This breakthrough comes after a turbulent year, with Google grappling with the emergence of generative AI and heightened regulatory scrutiny.

Generative AI has had a profound impact on Google, pushing the company to make substantial changes. To stay ahead, Google has implemented significant adjustments to its search functionality, realigned its Search, Android, and hardware teams to focus on AI, and launched its own Gemini AI model. As part of this transformation, the company has also cut projects and laid off employees, though it continues to thrive.

Investors have welcomed the transformation with enthusiasm, driving Google parent company Alphabet to a $2 trillion market cap, maintaining it throughout an entire trading day. This achievement places Google as the fourth most valuable public company in the world, trailing Nvidia ($2.2 trillion), Apple ($2.6 trillion), and Microsoft ($3.0 trillion). Amazon and Meta lag behind at $1.8 trillion and $1.1 trillion, respectively.

Google’s profitability also surged in Q1 2024, with a net income of $23.7 billion on revenue of $80.5 billion, according to the company’s latest earnings report. This represents a 15 percent increase in revenue year over year and a 14 percent increase in profit compared to the previous holiday quarter, indicating solid business fundamentals. YouTube advertising revenue grew nearly 21 percent, and subscriptions, platforms, and devices revenue rose 18 percent year over year, largely driven by premium YouTube subscriptions.

While Google laid off over a thousand employees to streamline operations and increase profits, the pace of layoffs seems to have slowed. In January alone, Google spent $700 million on layoffs, but in Q1, it spent only $716 million on severance and related charges across January, February, and March.

Despite some disruption, Google continues to innovate and explore new avenues for monetization. It has launched AI-powered tools for advertisers through its Performance Max tool, yielding a 63 percent higher likelihood of launching successful campaigns. Additionally, Discover Financial has implemented AI tools for its call center agents, and Ikea has seen increased revenue from “value-based bidding solutions.”

As Google embraces AI, the company is cautious about its impact on search. CEO Sundar Pichai mentioned that the focus is on areas where AI can improve the search experience without overly disrupting traffic to websites and merchants.

Google is set to share more details about its future plans during its upcoming developer conference, Google I/O, on May 14th. To read more about Google’s Q1 2024 earnings and the company’s roadmap, check out the full report on The Verge.