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Google / Alphabet stock analysis. Ticker: $GOOG $GOOGL
Google just reported earnings and the stock dropped by over 7%..
Despite the reaction, this was another impressive quarter from Google.
Search revenue grew by 13% to 48 billion. YouTube ads grew 16% to 9.2 billion. Google subscriptions grew 23% to 10.8 billion and Google Cloud grew 26% to 9.2 billion. The one disappointment was Google Network which saw a 2% decline.
To put those numbers in perspective, Google has now reported 307 billion of revenue over the last 12 months, 74 billion of net income and 124 billion of adjusted ebitda. Net income in 2023 was also 23% higher than the year before and now stock is at only 24 times earnings. Account for one-off restructuring charges and the multiple is even lower.
So why did the stock drop? The obvious answer is that while results were good, they weren’t quite good enough. Google’s total advertising revenue may have grown 11% but it came in just below analyst estimates. And zooming out, Google’s full year revenue growth, at just under 9% is the lowest in the company’s recent history.
More broadly, there’s a clear debate going on about the future of Google Search and its place in a world of artificial intelligence. If AI tools and chat bots take market share away from Google search, the stock would face significant downside pressure, since search continues to be the company’s largest revenue driver.
#investing #googlestock #stocks #3mb
