【Earnings Summary】Google, strong advertising, cloud business grows by 29%!
Alphabet, the parent company of Google, $Alphabet-A (GOOGL.US)$announced its financial results for the second quarter of 2024 (April-June) on August 24 (Japan time), exceeding analysts' revenue and profit expectations.The cloud business performed particularly well, achieving revenue for the first time in the second quarter utilizing AI.exceeded $10 billionfor the first time, and also contributed to the demand for digital advertising, which is its main business.However, advertising revenue from YouTube fell below expectations, despite the diminished competition with TikTok.![]()
Capital expenditures on AIare promising.131.86 billion dollarsand increased from 12 billion dollars in the first quarter.
Google then stated during the earnings call that they are leveraging AI to enhance search quality, improve search usage and user satisfaction, support the growth of cloud business with AI products, and noted that the risk of 'underinvestment' in AI is far greater than the risk of 'overinvestment'.
In after-hours trading in the US stock market on the 23rd, Alphabet temporarily rose by nearly 3%, but then turned to a drop of over 2%. The stock has risen by over 30% since the beginning of the year.over 30% increaseis doing.
Revenue compared to the same period last yearExceeded market expectations of $84.3 billion by 14% to $84.742 million.Adjusted net profit per share is $1.89, exceeding the market estimate of $1.85.Net profit increased by 28.6% year-on-year to $23.619 million, surpassing the market expectation of $22.9 billion.According to the earnings report, the revenue of Alphabet's core business, the advertising business, is Revenue from advertising business。
Increased by 28.6% to $23.6 billion, surpassing the market expectation of $22.9 billion.According to the earnings report, revenue from Alphabet's main business, the advertising business, wasRevenue of 64.6 billion and 16 million dollars, up 11%.Exceeded the expected 64.5 billion and 32 million dollars.。Cloud business revenue.Revenue increased by 28.8% to 10.3 billion and 47 million dollars, higher than the expected 10 billion and 91 million dollars.Revenue of YouTube advertising revenue, a video posting site, was 8.663 billion dollars, up 13%. Other business revenues were 9.376 billion dollars.AI products are beneficial to cloud business.
Google's cloud business adds a new growth driver with the development of AI products. In the cloud computing market, Google Cloud is currently ranked third following, but with its excellent capabilities in AI development, Google Cloud's revenue in the last quarter increased by 28.8% to $10.347 billion, exceeding $10 billion for the first time. Investors are paying attention to Google Cloud as a division that can most boost Alphabet's growth. $Amazon (AMZN.US)$や $Microsoft (MSFT.US)$Google Cloud's revenue in the last quarter has increased by 28.8% to $10.347 billion, exceeding $10 billion for the first time. Google Cloud's revenue10.3 billion47 million dollars, exceeding for the first time 10 billion dollarsInvestors are looking at Google Cloud as a division that can most boost Alphabet's growth.
Google's Chief Investment Officer (CIO) Ruth Porat stated in a conference call, "Our strengths in AI, AI infrastructure, and AI solutions for cloud customers have produced results. It is certain that customer companies are relying on us to enhance their capabilities."
In the artificial intelligence (AI) market, Google, like its competitors, has been swiftly adding AI capabilities to all its popular services such as Gmail, Google Docs, and Search, aiming to prove its ability to withstand competition, with mixed results.
Daniel Morgan, Senior Portfolio Manager at Sinovas Trust, stated, "I wonder how much revenue AI is generating. Looking at the financial reports, Google continues to generate profit from advertising and search."
"Are there clearer evidence of return on investment (ROI) regarding Google's massive investment in AI?" Some investors are questioning.
Alphabet launched a new feature called "AI Overviews" in the USA in May, utilizing AI to summarize content at the top of search pages, increasing search usage and user satisfaction, particularly appealing to younger users.
Evelyn Mitchell-Wolf, an analyst for e-marketers, stated, "If the situation involves extra effort in searches outside of Google, Google will likely continue to generate higher revenue from search traffic than its competitors."
Google expects full-year operating margin for the fiscal year 2024 to surpass that of 2023, but the third quarter could be negatively impacted by increased depreciation expenses and costs, with some of the reasons being related to AI investment.Increase in AI investmentas well asthe launch of the next-generation mobile phone 'Pixel'also exists.
Ruth Porat, Google's Chief Financial Officer (CFO), stated that Google's capital expenditure for the second quarter exceeded the market's expectations of 12.2 billion dollars, reaching 13.2 billion dollars, and was allocated to AI and computing capabilities improvement. She expects the quarterly capital expenditure for the rest of the year to remain around 12 billion dollars.
Google's Chief Executive Officer (CEO) Sundar Pichai pointed out in the earnings call that the risk of 'underinvestment' in AI is much greater than the risk of 'overinvestment'.
Google Earnings Call Comprehensive Guide!Understand it in one read! >>
This article uses auto-translation in some sections
Source: Bloomberg, Reuters, Alphabet IR Information
ーMoomoo news Kouchi
Source: Bloomberg, Reuters, Alphabet IR Information
ーMoomoo news Kouchi
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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