Alphabet Ad Revenue Misses Estimates, Shares Slide 7% After Hours
GOOG is trading near its 52-week low of $267.17 (9.7% above the low).
Summary
Alphabet's Q3 revenue of $127.6B narrowly missed analyst expectations, and the services/advertising business came in at $96.3B versus the $98.5B consensus — the miss that matters, since ads still drive the bulk of the business. Shares fell as much as 7% in after-hours trading, a decline that could be the worst in years. Cloud was the bright spot at $30.7B, ahead of expectations, with 25% overall revenue growth and Q3 cloud revenue jumping 103%; the Google Cloud CEO said TPU system sales were a meaningful contributor to cloud revenue, with nearly 100 customers currently using TPUs and strong demand from many others. Google sold more than 100M seats for knowledge work across AI services, the Google Cloud CEO said, and growing cybersecurity risks are driving demand for its AI-powered security platform. Microsoft, the other ticker here, reported Azure growth of 48% and revenue of $92.28B, up 19% and ahead of the $90.62B consensus — a clean beat that contrasts with Alphabet's top-line shortfall. The read-through is that AI infrastructure spending is paying off faster at Microsoft's cloud than at Google's ad-supported model right now.
At the time of this announcement, GOOG was trading at $292.97 on NASDAQ in the Technology sector, with a market capitalization of approximately $4T. The 52-week trading range was $267.17 to $404.47. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Dow Jones Newswires.