Alphabet, the world's largest provider of search and video ads, on Tuesday reported a 14 per cent drop in second-quarter net profit on an annual basis, as the company missed the analysts' sales expectations.

Net profit at Google's parent company dropped to about $16 billion in the three months to the end of June, more than $2.5bn less than the same period in 2021. Net profit on a quarterly basis fell about 2.6 per cent.

Revenue during the period rose 13 per cent annually to $69.7bn against expectations of about $70bn.

“In the second quarter, our performance was driven by search and cloud [businesses] … the investments we have made over the years in AI [artificial intelligence] and computing are helping to make our services particularly valuable for consumers and highly effective for businesses of all sizes” Alphabet’s chief executive Sundar Pichai said.

“As we sharpen our focus, we will continue to invest responsibly in deep computer science for the long term.”

Alphabet stock rose nearly 2.3 per cent to $107.4 a share in after-hours trading on Tuesday. Following the moves of Apple and Tesla in the past couple of years, the company carried out a 20-for-1 stock split on July 15.

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