Alphabet Rises on Sales Beat Fueled by Google Cloud Unit Growth

Alphabet Inc. reported a surge in demand for its cloud and artificial intelligence services last quarter, pleasing investors who sent its shares up even as the company said capital spending for the year would be higher than expected.

Third-quarter sales, excluding partner payouts, rose to $87.5 billion, Alphabet said in a statement Wednesday. That topped the $85.1 billion expected on average by analysts, according to data compiled by Bloomberg. Net income was $2.87 per share, compared with Wall Street’s estimate of $2.26.

The company is investing record amounts to try to push progress in AI, and infuse answers and assistance ...