Alphabet and Meta Show Divergent Earnings Performance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy GOOGL?
Source: CNBC
- Earnings Growth Highlights: Alphabet reported a 20% revenue growth in its latest earnings, with cloud revenue soaring 63%, showcasing strong performance amid skyrocketing AI infrastructure demand, and it expects capital expenditures to rise to $180 billion to $190 billion by 2026, reflecting confidence in future growth.
- Meta Capex Adjustment: Meta raised its 2023 capital expenditure guidance to between $125 billion and $145 billion, primarily due to rising component prices and increased data center costs, although its sales jumped 33% year-over-year, it still needs to demonstrate the returns on its AI investments.
- Divergent Market Reactions: While Alphabet's stock surged 7% in after-hours trading, Meta's shares fell 7%, reflecting differing market expectations regarding the returns on AI investments, with Alphabet's cloud infrastructure advantage making it more attractive.
- AI Investment Strategy: Meta's CFO stated that the company must invest heavily in AI to meet infrastructure needs and ensure strategic flexibility for the future, and although the returns on investment have yet to materialize, Zuckerberg emphasized the potential for increased user engagement and advertiser value.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to fall
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 388.430
Low
305.00
Averages
374.25
High
400.00
Current: 388.430
Low
305.00
Averages
374.25
High
400.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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