Alphabet Inc. (NASDAQ: GOOGL), the revenue engine of which is Google, has had a stock price increase of 47% in the past year. That compares to a 20% gain for the S&P 500. Despite worries about the digital advertising market, the company’s dominant position in the sector may be what drives the shares.

Google has about 25% of the U.S. digital ad market, followed by Meta (mostly Facebook revenue) at 18% and Amazon at 15%. No other company has a double-digit percentage market share.

In its most recently reported quarter, Alphabet revenue rose 13% from a year ago to $86.3 billion. Operating income was $23.7 billion, up from $18.2 billion. (This is how much money Alphabet makes every minute.)

The company signaled that it would continue to watch costs. It laid off 12,000 people last year. Chief Financial Officer Ruth Porat commented, “We remain committed to our work to durably re-engineer our cost base as we invest to support our growth opportunities.”

Three engines drive Alphabet’s revenue. The first, Google Search, comes primarily from advertising at its own site. Revenue from this in the most recent quarter was $48.0 billion. The next business is what it makes from ads it runs on other websites. Google Network had revenue of $8.3 billion last quarter. Finally, YouTube, often described as the largest video site in the world, had revenue of $9.2 billion, the huge majority of which was advertising, although it has begun to enter the video subscription business.

If stock prices signal anticipation of future earnings, investors expect that the quarter about to be announced will be strong.

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