Shares of Google rose nearly 12% after the web search leader's profit beat forecasts for the first time in the last six quarters.
The share price was boosted by strong advertising revenue and comments by its new chief financial officer on disciplined spending.
Google rallied to $673.50 in extended trading after closing at $601.78 on Wall Street. That would mark an all-time high for the stock in regular trading if it closes at that level on Friday, adding roughly $40 billion to its market value.
Google remains the most valuable publicly traded US company after Apple.
Google's said last night that its expenses rose 10% to $12.9 billion in the second quarter to the end of June from the year-ago quarter, and remained at 73% of revenue.
But expenses only grew by $91m from the first quarter, and as a percentage of revenue declined by a percentage point.
"The decline in quarter-over-quarter operating expenses reflects, in part, discipline in expense management and, in part, lower legal expenses than in comparable periods," CFO Ruth Porat told analysts on a conference call.
The company said its advertising revenue grew 11% to $16.02 billion from the same time last year, while the number of ads, or paid clicks, rose 18%. Advertisers pay Google only if a user clicks on one of its ads.
"Cost per click," or the average price of online ads, fell 11%, but was more than offset by the increase in ad volumes.
Google's ad revenue has been under pressure as consumers access its services on mobile devices such as smartphones and tablets, whose ad rates are typically lower.
The company said its consolidated revenue rose 11% to $17.73 billion in the quarter. Net income rose 17% to $3.93 billion from $3.35 billion.
Excluding one-time items, Google earned $6.99 per share.
Analysts on average had expected a profit of $6.70 per share, and revenue of $17.75 billion, according to Thomson Reuters I/B/E/S.
