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
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Travel trends you can expect this summerThe Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What's Next for Stocks After a Chaotic SpringA chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Where to Invest in an Uncertain MarketIn an uncertain market, you can still pocket juicy payouts ranging from 4% to 14%, depending on risk.
-
My First $1 Million: Events Industry CEO, 65, Northern New JerseyEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Stock Market Today: Investors Look on the Bright SideA generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.
