Alphabet, Google’s parent company, will report earnings after the bell on Thursday, adding to this week’s results from big tech companies. The tech giant’s shares are up 13.9% this year as of Wednesday’s close and up 50% over the past 12 months, as investors hailed the company’s cloud business and growth in artificial intelligence investments and tools. Alphabet’s recent layoffs also reassured investors. Analysts polled by the London Stock Exchange Group (LSEG) had expected first-quarter earnings of $1.51 per share on revenue of $78.59 billion. Earnings per share are expected to grow approximately 29% year-over-year, with revenue growing approximately 12.6%. What Wall Street wants to see: Artificial intelligence, cloud growth, advertising trends Beyond the headline numbers, analysts are keeping a close eye on revenue from Alphabet’s Google Cloud business, YouTube advertising and its traffic acquisition costs. Updates on the company’s AI products and advertising trends will also be top of mind, especially as the digital advertising market has improved significantly. Meta Platform’s earnings report on Wednesday shook the market and the company said it will invest heavily to achieve its artificial intelligence goals. Analysts are generally bullish on Alphabet stock. According to FactSet, about 80% of analysts have a buy or overweight rating on the stock, and consensus price targets suggest a 5.5% upside from Wednesday’s closing price. Jefferies analyst Brent Thiel remains bullish on Alphabet, saying he expects strong first-quarter results with strong advertising, resilient consumer spending and possibly consistent cloud demand. He has a buy rating on the stock with a price target of $180, saying the stock remains reasonably valued despite a slow start this year. Thiel said in an April 19 report: “We’ll hold GOOGL stock in 2 months as we see it moving higher on improving momentum in the core ad business and eventually (’25?) increased visibility on AI tailwinds,” “Google Cloud Computing stocks could be the next breakout point.” “We expect Google to report solid results in the first quarter, with ad revenue growing at a double-digit rate year-on-year due to general competition, an improved macro backdrop for ad spending, and growing adoption of AI solutions.” Analysts said this information in a report on Sunday. “We expect the cloud business to maintain healthy growth of around 20% in the first quarter,” he said, adding that the fourth quarter was Alphabet’s fastest revenue growth since the start of 2022, with company revenue of $86.31 billion, up 13% from the same period last year. and exceeded analysts’ expectations of $85.33 billion. Per London Stock Exchange Group. Earnings per share for the period were $1.64, compared to analysts’ expectations of $1.59 per share. However, the company had advertising revenue of $65.52 billion, missing analysts’ expectations of $65.94 billion, according to StreetAccount. It saw the stock price drop 7.5% on January 31 after the article was published. GOOGL YTD Series Alphabet ( GOOGL ) 2024 Performance Alphabet-owned YouTube’s fourth-quarter ad revenue was $9.2 billion, slightly below Wall Street expectations. While YouTube has been a growth driver for the tech giant, TikTok has posed a threat to its dominance in short-form videos. Alphabet is facing changing user behavior, growing competition and greater regulatory challenges, Google search chief Prabhakar Raghavan asked thousands of employees earlier this week. “Things are not what they were 15 to 20 years ago,” he said. In artificial intelligence, Alphabet works on both sides of the technology: innovators and investors. The company launched its rebranded generative AI chatbot and voice assistant Gemini in February. It also embeds new generative AI capabilities into its products, including maps. In terms of investment, Google committed to investing $2 billion in OpenAI competitor Anthropic last year, when Google confirmed it had acquired a 10% stake in the artificial intelligence systems developer.
