Shares of Google's parent company Alphabet (GOOGL) are climbing up the price charts Wednesday after the search engine giant beat top- and bottom-line expectations in its third-quarter earnings report.
In the quarter ended September 30, Alphabet's revenue increased 15.1% year over year to $88.3 billion. Its earnings per share (EPS) were up 36.8% from the year-ago period to $2.12.
"The momentum across the company is extraordinary. Our commitment to innovation, as well as our long-term focus and investment in artificial intelligence (AI), are paying off with consumers and partners benefiting from our AI tools," said Alphabet CEO Sundar Pichai in a statement. "We generated strong revenue growth in the quarter, and our ongoing efforts to improve efficiency helped deliver improved margins."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results handily beat analysts' expectations. Wall Street was anticipating revenue of $86.3 billion and earnings of $1.84 per share, according to Yahoo Finance.
Alphabet's revenue growth was led by its Google Cloud unit, which reported 35% growth to $11.4 billion, driven by "accelerated growth in Google Cloud Platform (GCP) across AI Infrastructure, Generative AI Solutions, and core GCP products." Meanwhile, total advertising revenue increased 10.4% year over year to $65.9 billion, including 12.2% growth at YouTube to $8.9 billion.
Is Alphabet stock a buy, sell or hold?
Troubles off the price charts – including a federal judge's antitrust ruling against Google – have weighed on Alphabet stock in recent months, but shares remain nearly 30% higher for the year to date. And Wall Street is overwhelmingly bullish on the Magnificent 7 stock.
According to S&P Global Market Intelligence, the average analyst target price for GOOGL stock is $206.39, representing implied upside of 15% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Needham is one of those with a Buy rating on the communication services stock, along with a $210 price target.
"GOOGL is our top large-cap stock pick for 2024, owing to a strong macro backdrop, falling interest rates, record political ad spending, data advantages, and Generative AI integrations (which lower operational expenditures and drive revenue upside)," says Needham analyst Laura Martin.
Martin emphasizes Alphabet’s dominance in digital advertising, YouTube's rapid subscription revenue growth and its proprietary large language models as the keys to its long-term strategic position.
Related Content
-
Stock Market Today: Stocks Soar to Start the Santa Claus RallyAll three main equity indexes flew like the down of a thistle on Christmas Eve.
-
Investing for Charitable Giving: Discipline Reaps RewardsConsider doing nothing when markets get volatile, rather than shifting your charitable investing strategy in the moment.
-
Feel Free to Disagree, But Here's How to Bridge DifferencesRather than remaining at odds with those who disagree with you or simply shutting them down, here's how to lower the temperature.
-
Stock Market Today: Stocks Advance on Light Volume Thanks to Big TechEquities rose in a mostly sleepy session as Mag 7 names led the way.
-
Top 10 Myths About 1031 Exchanges, DebunkedAre you confused about 1031 exchanges? This brief guide busts the top myths about real estate's favorite tax-deferral strategy.
-
Take Charge of Retirement Spending With This Simple StrategyTo make sure you're in control of retirement spending, rather than the other way around, allocate funds to just three purposes: income, protection and legacy.
-
What You Need to Know About Working For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
How to Manage Portfolio Risk With Diversification"Don't put all your eggs in one basket" means different things to different investors. Here's how to manage your risk with portfolio diversification.
