Alphabet (Google) reported strong third-quarter earnings on October 26, 2023, driven by its advertising and cloud computing businesses.
Total revenue for the quarter was $74.6 billion, up 7% from the same period last year. Earnings per share were $1.21, up 19% from the same period last year.
Google’s advertising business, which accounts for the majority of the company’s revenue, grew 6% year-over-year to $69.1 billion. This growth was driven by strong demand for search and video advertising.
Google’s cloud computing business, Google Cloud Platform (GCP), grew 28% year-over-year to $8.1 billion. GCP is now the third-largest cloud computing platform in the world, behind Amazon Web Services and Microsoft Azure.
Alphabet’s CEO, Sundar Pichai, attributed the company’s strong performance to its “focus on innovation and growth.” He also highlighted Alphabet’s investments in new areas, such as artificial intelligence and machine learning.
What do Alphabet’s earnings results mean for investors?
Alphabet’s earnings results are good news for investors. The company’s advertising and cloud computing businesses are both growing rapidly, and the company is investing in new areas that could drive future growth.
Alphabet’s stock price has fallen by about 20% year-to-date, but the company’s earnings results suggest that the stock is undervalued. Investors who believe in Alphabet’s long-term growth prospects may want to consider buying shares of the stock.
However, there are some potential challenges that Alphabet could face in 2024.
A potential economic slowdown: The global economy is facing a number of headwinds, including inflation, rising interest rates, and supply chain disruptions. A potential economic slowdown could hurt Alphabet’s advertising and cloud computing businesses.
Increased competition: Alphabet faces increasing competition from rivals such as Amazon, Microsoft, and Meta. These rivals are investing heavily in their advertising and cloud computing businesses.
Regulatory scrutiny: Alphabet is facing increasing regulatory scrutiny from governments around the world. This could lead to new regulations that could hurt Alphabet’s business.
Despite the potential challenges, Alphabet is well-positioned for continued growth in 2024 and beyond. The company has a strong track record of innovation, and it is investing heavily in new areas such as artificial intelligence and machine learning.
Conclusion
Alphabet’s earnings results are good news for investors. The company’s advertising and cloud computing businesses are both growing rapidly, and the company is investing in new areas that could drive future growth.
However, there are some potential challenges that Alphabet could face in 2024, such as a potential economic slowdown, increased competition, and regulatory scrutiny.
Investors should carefully consider all of the risks and rewards before making an investment decision.