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Google parent Alphabet (GOOGL) on Tuesday reported fourth quarter earnings and revenue that topped consensus estimates. But GOOGL stock fell as the core advertising business slightly missed views while cloud computing revenue growth re-accelerated and beat.
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Reported after the market close, Google earnings for the quarter ending Dec. 31 jumped 56% to $1.64 a share. The tech giant reports Google earnings under generally accepted accounting principles, also known as GAAP.
In Q4, Google’s gross revenue rose 13% to $86.31 billion.
Also, Google’s Q4 advertising revenue rose 11% to $65.52 billion vs. estimates of $65.82 billion.
Analysts polled by FactSet had projected EPS of $1.60 on revenue of $85.25 billion.
Google Stock: Cloud Growth Beats
Google said cloud-computing revenue rose 25% to $9.19 billion, topping estimates of $8.94 billion. Google’s cloud-computing business posted 22% growth in the September quarter.
Meanwhile, YouTube ad revenue rose 15% to $9.2 billion, in-line with estimates.
On the stock market today, GOOGL stock fell 4.3% to near 145 in extended trading.
“We would like to point out that this is a fundamentally stronger quarter — gross revenue, search, YouTube, and cloud and Google other revenues all accelerated quarter-over-quarter,” said Evercore ISI analyst Mark Mahaney in a report. He added: “That said, we believe the price actions following the print reflect the higher expectations that weren’t exceeded.”
In Q4, Google repurchased $16.2 billion of its own stock. In the September quarter, it repurchased $15.78 billion.
Also, Google’s Q4 traffic acquisition costs rose 8% to $13.98 billion. Google’s internet search-related payments to Apple (AAPL) are a key issue in the Department of Justice’s antitrust lawsuit vs. Alphabet.
GOOGL Stock Performance
Google rebounded from a sell-off after it reported September quarter 2023 results. GOOGL stock sold off 13% on Oct. 25, the first day of trading after the Q3 report. Shares hit a low of 121.46 on Oct. 27. But Google stock went on to rally 26% over the next three months before today’s Q4 Google earnings report.
Heading into the Google earnings report, Alphabet shares had gained 9% in 2024. In 2023, Google stock climbed 58% in 2023, though other big cap tech stocks — Meta Platforms (META), Amazon.com (AMZN) and Netflix (NFLX) did even better.
Also, GOOGL stock holds a Relative Strength Rating of 89 out of a best-possible 99, according to IBD Stock Checkup.
Meanwhile, Google stock is extended and trades above a buy zone.
Follow Reinhardt Krause on X, formerly called Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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