The markets welcomed with open arms the results of Alphabet, the parent company of Google, which exceeded all expectations. The company led by Sundai Pichar did not leave even the slightest loophole to panic investors despite the legal storm that threatens the cabinet, and has He fulfilled by far all the tasks that the analysts assigned to him. The company is celebrating it with increases of up to 4% in the after hours of Wall Street.
Thus, Google recorded revenue of $88.27 billion, up 15% year-on-yearcomfortably exceeding the 86.45 billion expected by the analyst consensus. Its profits also exceeded expectations: 2.12 dollars per share, against 1.84 calculated. Once the user acquisition costs are discounted, this equates to approximately $28.52 billion, exceeding the $26.67 billion estimated by the markets.
Data from its main business segments is even more positive. THE researcha segment in which it faces competition for the first time in decades after the emergence of AI cats, 49.39 billion entered, surpassing the expected 49.08 billion. YouTube earned $8.92 billion, surpassing the expected $8.89 billion, and managed to surpass $50 billion per year between ads and subscriptions for the first time in its history. Google Cloudone of the “weakest” branches of the company, managed to earn 11,350 million, against 10,790 estimated. and the area of servicesthe future of the company, reached 76,510 million, against the calculated 75,240.
Alphabet thus kicks off a week during which five of the “Magnificent Seven” will be closely examined by analysts. The company led by Sundar Pichai has very busy months in court: first with a conviction for monopoly and the threat of a forced division hanging over his head; then another sentence, still suspended, which would force him to offer an alternative to the Play Store to download apps on Android phones.
With this judicial panorama, the company’s excellent results continue to be cited in the background. Above all, investors need to know the real risks the company faces. The concern is maximum regarding the company, which trades for 22 times earnings below its historical average of 27 timesa sign that the market has put its stock market potential on hold due to regulatory uncertainty.
“It’s easy to shout about the company’s valuation, but there are many fears that are difficult to quantify, which means that I can’t tell yet if it’s a value or a value trap“, commented George Cipolloni, portfolio manager at Penn Mutual Asset Management, ahead of the results. “It is clear that It seems cheap compared to other Magnificent Sevens, but it’s relative because of the risk you’re takingDespite this, there are still high hopes that it will avoid dismemberment as Microsoft has done.
Additionally, this month the company replaced Prabhakar Raghavan, head of Google’s core search and advertising business, in an effort to address the risks AI poses to its traditional business model.
