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
-
Investing Abroad Could Pay Off — Here's HowCountries overseas are stimulating their economies, and their stocks are compelling bargains.
-
Retire in Belize for Stunning Natural Beauty and CultureBelize offers miles of protected land and ocean, a rich mix of cultures and a chill lifestyle. Best yet — the income requirement is just $2K per month.
-
Why Investing Abroad Could Pay Off
Countries overseas are stimulating their economies, and their stocks are compelling bargains.
-
Are These the Next Stocks to Split?Interactive Brokers' recently split its stock to makes its shares more accessible to investors. Could these high-priced stocks be next?
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a RecessionRecessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income PlanningOnce you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.
-
Stock Market Today: Stocks Swing as Trump Scraps Canada Trade TalksDespite a mid-afternoon slip, the S&P 500 and Nasdaq ended the day at new record highs.
-
Why Smart Retirees Are Ditching Traditional Financial PlansFinancial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around YouWhile thinking about succession planning might feel like anticipating a landslide (here's to you, Fleetwood Mac), there are strategies you can implement to manage the uncertainty and the transition.
