Alphabet Q4 Earnings Call Highlights
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy GOOG?
Source: Yahoo Finance
- Significant Revenue Growth: Alphabet reported fourth-quarter revenue of $113.8 billion, an 18% year-over-year increase, with annual revenue surpassing $400 billion for the first time, highlighting strong growth in Search and Cloud businesses that further solidifies its market leadership.
- Net Income Surge: The company saw a 30% increase in net income to $34.5 billion for the quarter, with earnings per share rising 31% to $2.82, despite a $2.1 billion stock-based compensation charge, indicating robust financial performance driven by successful AI-driven business expansion.
- Cloud Business Acceleration: Google Cloud revenue soared 48% to $17.7 billion in Q4, with operating income exceeding $5.3 billion and operating margin expanding from 17.5% to 30.1%, reflecting strong demand for AI products that propelled rapid business growth.
- Expanded Capital Expenditure Plans: Alphabet anticipates capital expenditures between $175 billion and $185 billion in 2026, primarily for investments in AI computing capacity, demonstrating the company's commitment to future technological advancements and its long-term strategic positioning in the market.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy GOOG?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on GOOG
Wall Street analysts forecast GOOG stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for GOOG is 336.08 USD with a low forecast of 255.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
14 Buy
1 Hold
0 Sell
Strong Buy
Current: 340.700
Low
255.00
Averages
336.08
High
400.00
Current: 340.700
Low
255.00
Averages
336.08
High
400.00
About GOOG
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.
Ark Investment Continues to Increase Alphabet Holdings Ahead of Earnings
- Increased Holdings: Ark Investment has been steadily increasing its position in Alphabet ahead of the company's earnings report, with ARK Autonomous Technology & Robotics ETF (ARKQ) purchasing 11,168 shares and ARK Space & Defense Innovation ETF (ARKX) adding 1,422 shares on February 3, indicating strong confidence in the company's future performance.
- Current Holdings: As of now, Alphabet ranks as the 10th largest holding in ARKQ with 195,758 shares valued at nearly $66.7 million, and the 14th largest in ARKX with 65,710 shares worth about $22.4 million, reflecting Ark's significant investment in Alphabet.
- Earnings Expectations: Alphabet is set to report its Q4 earnings on February 4 after market close, with Wall Street expecting an EPS of $2.64 and revenue of $111.48 billion, implying a year-over-year growth of 15.5%, which will have a crucial impact on its stock price.
- Market Performance: Over the past year, Alphabet's shares have surged by 68.8%, significantly outperforming the broader market, indicating strong investor confidence in its growth potential, particularly in the AI and cloud computing sectors.
See More
Insights from Alphabet's 133x Stock Growth Since IPO
- Significant Stock Growth: Since its IPO in August 2004, Alphabet's stock has increased over 133 times, with a compound annual growth rate exceeding 25%, demonstrating its strong market performance and investment appeal.
- Future Investment Potential: Even assuming a future average return of 15%, a $1,000 investment today could grow to over $18,821 in 21 years, showcasing the attractive returns of long-term investing.
- Market Challenges and Opportunities: While maintaining a 15% annual return in the future poses challenges, especially with a market cap exceeding $4 trillion, Alphabet still has the potential to be a core long-term portfolio staple.
- Innovation-Driven Strategy: If Alphabet continues to prioritize innovation as its core strategy, it is expected to maintain a strong market position, thereby providing investors with ongoing growth opportunities.
See More
Alphabet Achieves 25% Annualized Return Since IPO
- Outstanding Market Performance: Since its IPO in August 2004, Alphabet has achieved a market cap exceeding $4 trillion, with its stock value increasing over 133 times and a compound annual growth rate surpassing 25%, demonstrating its strong performance and leadership in the tech sector.
- Future Growth Potential: Although the expected average return may drop to 15% over the next 20 years, a $1,000 investment today could grow to over $18,000 in 21 years, indicating significant long-term investment value.
- Innovation-Driven Strategy: Alphabet is seen as having all the tools to become a core long-term portfolio staple, with continuous innovation being crucial for maintaining competitiveness and market share, despite the challenges of sustaining a 15% annual return in the future.
- Investment Advisory Caution: Despite Alphabet's impressive performance, the Motley Fool analyst team has not included it in their current list of best stocks to buy, advising investors to be cautious and consider other potential high-return investment opportunities.
See More
Nvidia Deepens Investment in CoreWeave
- AI Chip Market Leader: Nvidia, as the world's leading AI chip designer, has its GPUs excel in critical AI tasks, driving significant revenue growth quarter after quarter, thereby solidifying its dominant market position.
- Major Investment in CoreWeave: As of the end of Q3, Nvidia had over 85% of its stock portfolio invested in CoreWeave and recently made a fresh $2 billion investment to support the cloud company's AI factory buildout, aiming for over 5 gigawatts of capacity by 2030, reflecting strong confidence in the partnership.
- CoreWeave Revenue Surge: CoreWeave reported a revenue jump to $1.3 billion in its latest earnings, achieving triple-digit growth, indicating robust demand and market potential in the AI cloud services sector, which further attracted Nvidia's attention.
- Infrastructure Risk: Despite Nvidia's backing, CoreWeave faces rising debt levels to support its infrastructure expansion, which could pose risks to future profitability, prompting investors to carefully assess its long-term investment value.
See More
Alphabet's Earnings Reveal Strong AI Demand Driving Cloud Growth
- Strong Earnings Report: Alphabet's Q4 revenue reached $113.8 billion, an 18% year-over-year increase that surpassed analyst expectations of $111.48 billion, indicating significant returns on the company's AI investments.
- Advertising Revenue Growth: Google search revenue grew 17% year-over-year, while overall ad revenue increased by 14%, alleviating market concerns about AI potentially siphoning off advertising dollars despite YouTube's weaker performance.
- Robust Cloud Services: Google Cloud revenue surged to $17.7 billion, marking a 48% increase, significantly outpacing Microsoft's Azure growth of 39%, showcasing Alphabet's strengthening position in the cloud computing market.
- Future Investment Plans: Alphabet plans to nearly double its capital expenditures to between $175 billion and $180 billion by 2026, up from approximately $91 billion last year, reflecting the company's long-term optimism in the cloud and AI sectors.
See More
Alphabet CEO Discusses AI and Compute Capacity Challenges
- AI-First Strategy: Alphabet CEO Sundar Pichai emphasized the company's decade-long commitment to an AI-first strategy, indicating ongoing investment and forward-thinking in technological innovation.
- Compute Capacity Constraints: Pichai highlighted the primary challenge of current compute capacity limitations, including constraints related to power, land, and supply chain, which could impact the company's long-term growth.
- Investment Efficiency: He mentioned the need to ensure the rationality and efficiency of long-term investments while meeting current demands, reflecting the company's strategic considerations in resource allocation.
- Market Demand Response: Pichai stated that Alphabet is working to enhance its ability to respond to market demands, ensuring it maintains a competitive edge globally, which is crucial for the company's future growth.
See More
Ark Investment Continues to Increase Alphabet Holdings Ahead of Earnings
- Increased Holdings: Ark Investment has been steadily increasing its position in Alphabet ahead of the company's earnings report, with ARK Autonomous Technology & Robotics ETF (ARKQ) purchasing 11,168 shares and ARK Space & Defense Innovation ETF (ARKX) adding 1,422 shares on February 3, indicating strong confidence in the company's future performance.
- Current Holdings: As of now, Alphabet ranks as the 10th largest holding in ARKQ with 195,758 shares valued at nearly $66.7 million, and the 14th largest in ARKX with 65,710 shares worth about $22.4 million, reflecting Ark's significant investment in Alphabet.
- Earnings Expectations: Alphabet is set to report its Q4 earnings on February 4 after market close, with Wall Street expecting an EPS of $2.64 and revenue of $111.48 billion, implying a year-over-year growth of 15.5%, which will have a crucial impact on its stock price.
- Market Performance: Over the past year, Alphabet's shares have surged by 68.8%, significantly outperforming the broader market, indicating strong investor confidence in its growth potential, particularly in the AI and cloud computing sectors.
See More
Insights from Alphabet's 133x Stock Growth Since IPO
- Significant Stock Growth: Since its IPO in August 2004, Alphabet's stock has increased over 133 times, with a compound annual growth rate exceeding 25%, demonstrating its strong market performance and investment appeal.
- Future Investment Potential: Even assuming a future average return of 15%, a $1,000 investment today could grow to over $18,821 in 21 years, showcasing the attractive returns of long-term investing.
- Market Challenges and Opportunities: While maintaining a 15% annual return in the future poses challenges, especially with a market cap exceeding $4 trillion, Alphabet still has the potential to be a core long-term portfolio staple.
- Innovation-Driven Strategy: If Alphabet continues to prioritize innovation as its core strategy, it is expected to maintain a strong market position, thereby providing investors with ongoing growth opportunities.
See More
Alphabet Achieves 25% Annualized Return Since IPO
- Outstanding Market Performance: Since its IPO in August 2004, Alphabet has achieved a market cap exceeding $4 trillion, with its stock value increasing over 133 times and a compound annual growth rate surpassing 25%, demonstrating its strong performance and leadership in the tech sector.
- Future Growth Potential: Although the expected average return may drop to 15% over the next 20 years, a $1,000 investment today could grow to over $18,000 in 21 years, indicating significant long-term investment value.
- Innovation-Driven Strategy: Alphabet is seen as having all the tools to become a core long-term portfolio staple, with continuous innovation being crucial for maintaining competitiveness and market share, despite the challenges of sustaining a 15% annual return in the future.
- Investment Advisory Caution: Despite Alphabet's impressive performance, the Motley Fool analyst team has not included it in their current list of best stocks to buy, advising investors to be cautious and consider other potential high-return investment opportunities.
See More
Nvidia Deepens Investment in CoreWeave
- AI Chip Market Leader: Nvidia, as the world's leading AI chip designer, has its GPUs excel in critical AI tasks, driving significant revenue growth quarter after quarter, thereby solidifying its dominant market position.
- Major Investment in CoreWeave: As of the end of Q3, Nvidia had over 85% of its stock portfolio invested in CoreWeave and recently made a fresh $2 billion investment to support the cloud company's AI factory buildout, aiming for over 5 gigawatts of capacity by 2030, reflecting strong confidence in the partnership.
- CoreWeave Revenue Surge: CoreWeave reported a revenue jump to $1.3 billion in its latest earnings, achieving triple-digit growth, indicating robust demand and market potential in the AI cloud services sector, which further attracted Nvidia's attention.
- Infrastructure Risk: Despite Nvidia's backing, CoreWeave faces rising debt levels to support its infrastructure expansion, which could pose risks to future profitability, prompting investors to carefully assess its long-term investment value.
See More
Alphabet's Earnings Reveal Strong AI Demand Driving Cloud Growth
- Strong Earnings Report: Alphabet's Q4 revenue reached $113.8 billion, an 18% year-over-year increase that surpassed analyst expectations of $111.48 billion, indicating significant returns on the company's AI investments.
- Advertising Revenue Growth: Google search revenue grew 17% year-over-year, while overall ad revenue increased by 14%, alleviating market concerns about AI potentially siphoning off advertising dollars despite YouTube's weaker performance.
- Robust Cloud Services: Google Cloud revenue surged to $17.7 billion, marking a 48% increase, significantly outpacing Microsoft's Azure growth of 39%, showcasing Alphabet's strengthening position in the cloud computing market.
- Future Investment Plans: Alphabet plans to nearly double its capital expenditures to between $175 billion and $180 billion by 2026, up from approximately $91 billion last year, reflecting the company's long-term optimism in the cloud and AI sectors.
See More
Alphabet CEO Discusses AI and Compute Capacity Challenges
- AI-First Strategy: Alphabet CEO Sundar Pichai emphasized the company's decade-long commitment to an AI-first strategy, indicating ongoing investment and forward-thinking in technological innovation.
- Compute Capacity Constraints: Pichai highlighted the primary challenge of current compute capacity limitations, including constraints related to power, land, and supply chain, which could impact the company's long-term growth.
- Investment Efficiency: He mentioned the need to ensure the rationality and efficiency of long-term investments while meeting current demands, reflecting the company's strategic considerations in resource allocation.
- Market Demand Response: Pichai stated that Alphabet is working to enhance its ability to respond to market demands, ensuring it maintains a competitive edge globally, which is crucial for the company's future growth.
See More
