Alphabet (GOOG, GOOGL) 02 (Aug 17 - Jul 24)

[winston]

by behappyalways:-

Google's Smartphone Loyalty Problem

https://www.zerohedge.com/technology/go ... ty-problem

[behappyalways]

Google's new AI search results are having quite the week. Here's a thread with some of my favorite answers:
https://x.com/JeremiahDJohns/status/1794543007129387208

[behappyalways]

Google sees every single thing you do in Chrome, regardless of what mode you're using
https://x.com/Mayhem4Markets/status/1811140938569503068

[behappyalways]

Who is Wiz? Just 4 years after its establishment, the company’s net worth skyrocketed, and it also attracted Google to launch a merger and acquisition at a sky-high price of 750 billion.

Wiz何方神聖？成立僅4年身價狂飆 還吸引谷歌開7500億天價併購 ｜非凡財經新聞｜20240716

https://m.youtube.com/watch?v=7X3ChXiHfe4

[winston]

not vested

2Q Results

Alphabet grew revenues by 14% compared the same quarter last year. They grew net income by 26%. And they grew operating margins from 29% to 32%.

Alphabet spent $13 billion in Q2 mainly on AI infrastructure (chips, servers, data centers) -- another huge number. That's up from $12 billion in Q1.

So, the requisite investment to build AI infrastructure continues to rise.

As for the return on investment: Sundar Pichai (GOOG CEO) said "year-to-date, our AI infrastructure and generative AI solutions ... have already generated billions in revenues."

When questioned about the big outlays, he said "the risk of under-investing is dramatically greater than the risk of over-investing." And he said the technology revolution (driven by generative AI) is still "at an early stage."

All of this, and the stock went down, despite trading for just 22 times forward earnings (in line with the market multiple).

Source: Forbes

[winston]

not vested

Alphabet released better-than-expected results for its fiscal second quarter.

The company reported earnings of $1.89 per share on $84.7 billion in revenue, up from earnings of $1.44 per share and revenue of $76.6 billion a year ago. That represents 31.3% year-over-year earnings growth and 14% year-over-year revenue growth.

Analysts were expecting earnings of $1.85 per share and $84.3 billion in revenue, so Alphabet topped earnings estimates by 2% and revenues by 0.5%.

Cloud revenue jumped nearly 29% year-over-year to $10.35 billion, up from $8.03 billion last year.

Advertising revenue rose 11.2% year-over-year to $64.6 billion, beating analysts’ expectations of $64.5 billion.

Although YouTube ad revenue increased about 13% to $8.66 billion, this was short of analysts’ expectations for $8.95 billion.

Year to date, our AI Infrastructure and Generative AI Solutions for Cloud customers have already generated billions in revenues, and are being used by more than 2 million developers.

Despite the strong results, GOOGL dropped 5% on Wednesday. The reality is analysts were expecting a bigger earnings beat, so the stock pulled back on profit-taking.

Source: Investor Place

[winston]

not vested

Alphabet Inc. – Extending AI leadership
PSR Recommendation: BUY
Status: Upgraded
Target Price: 205

2Q24 revenue was within expectations, but PATMI was above due to higher operating leverage. 1H24 revenue/PATMI were at 48%/51% of our FY24e forecasts.

Advertising is still resilient with 11% YoY growth, while Cloud growth accelerated (29% YoY) thanks to AI offerings.

Operating margin expanded 310bps YoY to 32.4% due to lower OPEX growth and increased AI-driven operational efficiencies, surpassing pandemic peak.

We keep our FY24e revenue unchanged but increase PATMI by 4% because of GOOGL’s continued focus on reducing costs.

We upgrade to a BUY from ACCUMULATE with a raised DCF target price of US$205 (prev. US$195).

Our WACC/growth rate assumptions remain unchanged at 7.3%/4.5%.

GOOGL is still the dominant player in digital advertising and the market leader in AI.

It is also currently trading at what we view as attractive valuations – 18x FY25e earnings, below its 10-yr average of 22x.

Source: Phillips

https://www.stocksbnb.com/reports/alpha ... eadership/