What happened

Shares of Alphabet (GOOGL 1.50%) (GOOG 1.46%) have surged sharply higher so far this week, jumping as much as 12.2%. As of the market close Thursday, the stock was still up 7.3%.

The catalyst that sent the tech giant higher was its fourth-quarter earnings report, which held a few surprises for investors. 

So what

Alphabet generated revenue of $75.3 billion, up 32% year over year. Its operating margin edged higher, climbing to 29% from 28% in the prior-year quarter, which fueled its growing bottom line. The search leader delivered net income of $20.6 billion, which resulted in earnings per share (EPS) of $30.69, which jumped 38%.

A person working on a laptop.

Image source: Getty Images.

To provide some perspective for that performance, analysts' consensus estimates pegged revenue at $67.4 billion and EPS at $25.44, so Alphabet sailed past investor's expectations.

Both of Alphabet's major segments contributed to its success as the Google services segment grew 31%, while the Google cloud segment surged 45%, bringing its run rate to $22 billion. 

The development that grabbed headlines, however, was Alphabet's decision to implement a 20-for-1 stock split. The measure, which will take the form of a special dividend, was approved by the board of directors and will be put to a shareholder vote. If approved, shareholders of record as of July 1 will receive 19 additional shares of stock after the market close on July 15.

Now what

Alphabet provided guidance only in the loosest sense of the word. Management's comments on the conference call indicate the company was pleased with the pace of growth in its services and cloud segments, as well as the momentum of demand for its Pixel 6 products, which boosted its hardware results.

While the maxim "firing on all cylinders" is frequently overused, it's an apt description of the proceedings for the Google parent. In fact, it's worth noting that Alphabet is by far the best-performing of the biggest tech stocks, gaining 45%, at a time when many technology issues have been under pressure.

Given Alphabet's path ahead and the company's consistent execution, I'd argue that Alphabet is a buy, even as the stock is near its all-time high.