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 Stable as Inflation, Tariff Fears EbbConstructive trade war talks and improving consumer expectations are a healthy combination for financial markets.
-
What Trump’s 'Big Beautiful Bill' Means for Your Utility BillsIf passed, the 'Big Beautiful Bill' could make home energy upgrades more expensive and raise monthly costs. Here's how much more you might pay and how to prepare.
-
Stock Market Today: Stocks Stable as Inflation, Tariff Fears Ebb
Constructive trade war talks and improving consumer expectations are a healthy combination for financial markets.
-
Eight Estate Planning Steps to Protect Your Loved Ones (and Your Legacy)Two-thirds of Americans don't have an estate plan. If you're one of them, these are the essential steps to take now to prevent problems for your family later.
-
The Six Pros This Adviser Says You Need to Sell Your BusinessSelling your business isn't as simple as getting the best price and walking away. These are the six professionals you'll need to get a deal across the finish line.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build WealthConsistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key PiecesIf retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or RelocateHomeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and FriendsWhat starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
