Shares of Alphabet rose in late trading on Tuesday after Google’s parent company reported earnings that were slightly worse than expected.
The company reported second-quarter revenue of $69.69 billion, up 13% year over year. Net income was $16 billion, or $1.21 per share.
Wall Street analysts expected earnings per share of $1.27, according to FactSet, on revenue of $69.87 billion.
Alphabet (bar stock:
Shares initially rose 3.7% in late trade.
This is urgent news. Read a preview of Alphabet earnings below and check back for more analysis soon.
Tuesday night is a big one for
And the rest of the stock market.
Not only will Google’s parent company help kick off the big tech earnings reporting season after the market closes, it will give investors a look at how consumers and advertisers are responding to the weak economy.
(stock ticker: MSFT) It also reports.
(GOOGL) stock is down nearly 26% in 2022, including last week’s loss after that
(SNAP) cited economic problems as hindering social media implementation
Chat advertising works. If the Alphabet report paints an even bleaker picture, it could crash into a bunch of stocks. On the flip side, a more-than-expected update could lead to more flames in a broader rush.
Wall Street expects GAAP earnings per share of $1.27, according to FactSet, on revenue of $69.87 billion. Mark Mahaney, an analyst at Evercorse ISI, wrote in a note Friday that he expects second-quarter revenue to come in at $69.9 billion, although he expects ad revenue growth to slow to 10.5% year-over-year at $55.7 billion.
While Mahani doesn’t think Alphabet will be immune to an economic downturn, he sees it as the most recession-resistant stock focused on advertising. He pointed out that Alphabet has not been affected as much as other Internet companies that rely on ads
It is moving to reduce the tracking of ads on its platform without consent. He said he believes its cloud segment will be more resilient given its software-as-a-service, or SaaS, and cost-efficiency model that its offerings offer to enterprise customers.
Barton Crockett, an analyst at Rosenblatt Securities, was also bullish on Alphabet stock, saying in a note Monday that investors should be prepared to hold the shares through the volatility a recession could bring. Although he believes the actual results may be worse than Wall Street expected, he received a buy rating and a fair value estimate of $205 for the stock price.
“We continue to see long-term strengths in Search, YouTube, and Google Cloud, making these stocks worth owning to eventually end up at some point from recession fears and headwinds,” he wrote. “Also, a peer-to-peer display of travel advertising, which remains strong, could help with relative trends in the near term.”
Of course, even if both Microsoft and Alphabet’s reports look good, investors won’t be out of trouble.
Both Apple and Amazon.com report results in the following days.
Write to Connor Smith at firstname.lastname@example.org
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