[Moo Brief] Alphabet Q2 earnings preview: Will AI-powered cloud and ads sectors beat market expectations?

$Alphabet-A (GOOGL.US)$, the parent company of Google, will hold its Q2 earnings call on July 23 at 1:30 PM Pacific Time.

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As of July 19 market close, $Alphabet-A (GOOGL.US)$ has risen by 29% to $178.39 this year. $Alphabet-A (GOOGL.US)$'s price target swung between $168 and $225. Bank of American Securities raised Alphabet's price target from $200 to $206 last Wednesday. But the question is, will Alphabet strike market expectations?

Market consensus on $Alphabet-A (GOOGL.US)$ revenue and earning per share is $84.28 billion with a 12.98% increase and $1.84 with a 27.71% growth, respectively.

$Alphabet-A (GOOGL.US)$ is looking to slow down TikTok's growth by leveraging its own short video platform. Analysts say that the money $Alphabet-A (GOOGL.US)$ can generate from YouTube Shorts is a key question for 2024. YouTube Shorts currently generates about 70 billion views per day.

Moreover, $Alphabet-A (GOOGL.US)$ has been experimenting with generative AI in Search and is starting to bring AI overviews to the main search results page. Alphabet has a global product footprint beyond Search and has brought many new AI features to Pixel, Photos, Chrome, Messages, and more.

In cloud computing, $Alphabet-A (GOOGL.US)$ remains the third-largest service provider behind $Amazon (AMZN.US)$ and $Microsoft (MSFT.US)$. Like Amazon Web Services and Microsoft's Azure business, Google Cloud has increased capital expenditure, targeting new opportunities for generative AI.

In addition, Google Cloud division claims to be partnering with 70% of generative AI startups and establishing close ties with one of the largest enterprise software manufacturers, $Salesforce (CRM.US)$.

$Alphabet-A (GOOGL.US)$ offers an industry-leading portfolio of NVIDIA GPUs along with their TPUs (Google's custom-developed application-specific integrated circuits (ASICs) used to accelerate machine learning workloads), and has developed an AI Hypercomputer that provides efficient and cost-effective infrastructure to train and serve models. Alphabet's Cloud business continues to grow, as they bring the best of Google AI to enterprise customers and organizations around the world.

$Alphabet-A (GOOGL.US)$ has been an AI-first company since 2016 and has made significant progress in AI. They have consolidated teams that build AI models under Google DeepMind and developed various AI models, including Gemini 1.5 Pro, which shows dramatic performance enhancements in long-text understanding. $Alphabet-A (GOOGL.US)$ has the outstanding infrastructure for the AI era, with data centers that are purpose-built for training cutting-edge AI models, and they have developed new AI models and algorithms that are more than 100 times more efficient than they were 3 years ago.

Dan Ives of Wedbush has listed $Alphabet-A (GOOGL.US)$ as one of the stocks that can benefit from the AI boom in his latest report. Bank of America Securities raised the target price of the tech giant's stock, saying that improvements in AI search and headcount measures may push up the company's stock price.

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