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."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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
-
Planning a Major Home Renovation? 3 Smart Ways to Finance ItFrom HELOCs to personal loans, here’s how to pay for a major home renovation without draining your savings.
-
Six Warren Buffett Quotes Every Retiree Should Live ByThe 'Oracle of Omaha' knows a thing or two about life, investing and retirement.
-
Six Warren Buffett Quotes Every Retiree Should Live By
The 'Oracle of Omaha' knows a thing or two about life, investing and retirement.
-
Budget Hacks Won't Cut It: These Five Strategies From a Financial Planner Can Help Build Significant WealthCutting out your daily latte might make you feel virtuous, but tracking pennies won't pay off. Here are some strategies that can actually build wealth.
-
To Unwrap a Budget-Friendly Holiday, Consider These Smart Moves From a Financial ProfessionalYou can avoid a 'holiday hangover' of debt by setting a realistic budget, making a detailed list, considering alternative gifts, starting to save now and more.
-
Stocks Rise to End a Volatile Week: Stock Market TodayThe market's fear index reached and retreated from a six-month intraday peak on Friday as stocks closed the week well.
-
I Bought Palantir When It Was Trading at $8. Now It's $180 and I've Made $1 Million. What Do I Do?What do you do with all that appreciated Palantir stock? We asked a financial expert for advice.
-
Treat Home Equity Like Other Investments in Your Retirement Plan: Look at Its Track RecordHomeowners who are considering using home equity in their retirement plan can analyze it like they do their other investments. Here's how.
-
Why Does It Take Insurers So Darn Long to Pay Claims? An Insurance Expert ExplainsThe process of verification, investigation and cost assessment after a loss is complex and goes beyond simply cutting a check.
-
Two Reasons to Consider Deferred Compensation in the Wake of the OBBB, From a Financial PlannerDeferred compensation plans let you potentially lower your current taxes and help to keep you out of a higher tax bracket. It's important to consider the risks.
