Alphabet Q3 Earnings: What to Expect?
The market expects solid growth as Google prepares to announce its Q3 2024 earnings. The company is projected to report $86.2 billion in revenue and $27.4 billion in operating profit, representing 12% and 14% year-over-year growth, respectively. With a stable advertising market and increasing momentum in cloud services and AI, Google's core businesses continue to thrive, making this a highly anticipated earnings release.
Alphabet Q3 Earnings Key Watch
Advertising
Google's advertising business remains its most important revenue driver, accounting for 78% of its total income. Notice that by Q2 2023, Google's advertising revenue bounced back unexpectedly, growing about 3.3% compared to the same time last year. In their latest Q2 2024 report, this growth jumped to around 11%, making it the fourth quarter in a row with rising revenue.
Analysts estimate that Q3 ad revenue will reach $66-67 billion, up from $64.6 billion in the previous quarter. This growth is supported by a stronger advertising environment, particularly in political ads, brand marketing, and sectors like automotive and consumer goods.
YouTube remains a major force in online video advertising. Its daily active users (DAU) are growing steadily, with a 1% increase in September alone, outperforming competitors like Facebook, Instagram, and TikTok. This strong user engagement is expected to lead to a 20% growth in YouTube ad revenue, highlighting the platform's dominance in video content consumption and its continued appeal to advertisers.
Besides, UBS reports that advertising budgets accelerated in August and September due to political campaigns, renewed brand investments, and improved consumer confidence. Google's advanced ad tools, like Performance Max, have been instrumental in helping advertisers achieve better results, which is expected to translate into higher ad revenues for the company.
Google Cloud
Google Cloud has emerged as a vital part of Google's growth strategy, with expected revenue growth of 25% in Q3. As the cloud services market slowed down, Google Cloud's growth also took a hit. It stayed at around 28% during the first two quarters of 2023 but dropped sharply to below 23% in Q3. However, the growth rose again from Q4 2023, climbing back above 28%. Looking ahead, investors will pay close attention to whether Google Cloud can keep growing at a fast pace.
Moreover, Google Cloud's rapid revenue growth and improved operational efficiency are expected to lead to higher profitability shortly. As Google refines its cloud offerings and continues to scale its services, analysts see a clear path to stronger profit margins in this segment.
AI
AI remains a major focus for Google, and it's seen as the company's next big growth opportunity. Google has invested heavily in AI technologies, from consumer-facing products like Google Assistant to enterprise-level data analytics and automation tools.
In Q2, Google merged its Google Research and DeepMind teams to create a new AI Plus division, focused on accelerating AI model development and integration into its products. This move is expected to strengthen Google's position in the AI space and create new growth opportunities. While AI is still in its early stages, Google is already seeing the benefits of these technologies in areas like advertising optimization, healthcare, and autonomous driving.
Google's massive investments in AI have raised some concerns about short-term costs. In Q2 2024, the company spent $23.8 billion on research and development, largely driven by AI-related projects. However, analysts believe these investments will pay off in the long term, with AI becoming a significant revenue stream as more use cases emerge.
Risks
Google has long been a focal point for global antitrust regulators. Despite successfully resolving several legal disputes in various countries and regions, the company still faces a new wave of antitrust scrutiny from the U.S., Europe, and other markets.
As global data privacy and security concerns continue to grow, Google must comply with increasingly stringent regulations, such as the European Union's General Data Protection Regulation (GDPR) and California's Consumer Privacy Act (CCPA). For Google, this raises compliance costs and increases the risk of violations, which could result in hefty fines and damage to its reputation.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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103916021 : k
Chak : The same article about Tesla would have been good one day before so that we could’ve bought some calls. When is the alphabet earnings?
74833762 Chak : 29th this month
71264238 Chak : I bought calls for Tesla.
As of Google, Because of this article, I am weary to buy calls. Could be a way to mislead people and the opposite will happen.
103160449 71264238 : relying on articles to make decisions?? lmao
102631709 : SATHIYAN AL NARAYANAL SAMY
103637048 : Sounds promising
Bullish Law : good buy