Boosted by huge digital advertising spending during the holiday shopping season, Alphabet reported quarterly revenue that beat Wall Street expectations. The stock rose 7 per cent in after-hours trading.

Alphabet, based in Mountain View, Calif., said in an announcement that excluding payments to distribution partners, the company posted revenue of $46.43 billion in the fourth quarter. The average analyst estimate is $44.2 billion, according to overall Bloomberg data.

Online ad sales have rebounded since the economic downturn at the beginning of the epidemic and marketers withdrew their ads. Analysts predict that as epidemic prevention and control measures force people to stay at home, Alphabet Inc-CL CWill benefit from the growth of online search activities and YouTube views.

The results were "driven by search and YouTube, with consumer and business activity recovering from earlier last year," said Ruth Porat, chief financial officer of Alphabet and Alphabet Inc-CL C.