Amazon and Alphabet Earnings Reveal AI Growth Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 hours ago
0mins
Should l Buy GOOGL?
Source: Fool
- Amazon Cloud Acceleration: Amazon's Q4 sales rose 14% year-over-year to $213.4 billion, with AWS revenue increasing 24% to $35.6 billion, highlighting AI's critical role in driving growth and marking the fastest growth in 13 quarters.
- Strong Advertising Revenue: Amazon's advertising revenue grew 23% year-over-year to $21.3 billion, subscription services rose 14% to $13.1 billion, third-party seller services increased 11% to $52.8 billion, and online store revenue climbed 10% to $83.0 billion, indicating broad and sustained financial momentum.
- Google Cloud Rapid Growth: Alphabet's total revenue grew 18% year-over-year in Q4, with Google Cloud revenue surging 48%, significantly outpacing Amazon's growth, showcasing Google's strong performance and market potential in the AI sector.
- Risk-Reward Tradeoff: While Amazon and Alphabet have similar P/E ratios of 28.6 and 28.1 respectively, Alphabet's faster cloud growth may offer higher returns, although both companies' substantial spending plans introduce increased investment risks.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise
33 Analyst Rating
26 Buy
7 Hold
0 Sell
Strong Buy
Current: 302.020
Low
305.00
Averages
374.25
High
400.00
Current: 302.020
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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