The Anticipated Surge in Alphabet’s Q3 Earnings and YouTube’s Advertising Revenue Growth
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Alphabet Inc (NASDAQ: GOOGL), the parent company of Google, is all set to unveil its third-quarter earnings reports on Tuesday. Analysts are expecting a significant surge in earnings, primarily attributing it to more favorable year-on-year comparisons. Furthermore, YouTube, Google’s renowned video-sharing platform, is also anticipated to witness a bounce-back in advertising revenue growth.
Analysts Predicted Increase in Earnings Per Share
Market forecasters are predicting a substantial 37% rise in earnings per share (EPS) to $1.46 for Google, the dominant player in the internet search industry. This announcement is scheduled to be made after the market’s closure for the September quarter. It is worth mentioning that Google experienced a 17% growth in earnings during the June quarter, breaking a streak of consecutive profit declines witnessed in the last five quarters.
Projected Rise in Gross Revenue and Digital Ad Revenue
For the third quarter, Google’s gross revenue is projected to increase by 10% to reach $76 billion, according to FactSet data. Furthermore, analysts are also foreseeing an 8.6% increase in core digital advertising revenue, amounting to $59.1 billion. Intra-quarter checks conducted by Evercore ISI analyst Mark Mahaney suggest a continued moderate recovery in the overall advertising spending environment, indicating a consistent allocation of budget towards internet search.
YouTube Bouncing Back with Revenue Growth
After witnessing a 2% decline in advertising revenue during the September quarter of 2022, YouTube is expected to bounce back with a substantial 10.7% increase to $7.82 billion in the current quarter. The management of Google is likely to shed light on the growth of YouTube TV subscribers, particularly in light of the recently acquired streaming rights for NFL Sunday Ticket.
Growth in Cloud Computing Revenue and Updates on Artificial Intelligence Initiatives
Google’s cloud computing revenue is also predicted to experience growth, with an anticipated increase of nearly 26% to reach $8.64 billion. Although this growth rate is slightly slower than the 28% growth witnessed in the second quarter, it still demonstrates a positive trajectory for Google’s cloud division.
Moreover, market analysts are eagerly waiting for updates on Google’s artificial intelligence initiatives. Of particular interest is “Gemini,” a new large language model developed by Google. The tech giant is reportedly planning to launch this AI model in the fourth quarter, with expectations that it will compete with OpenAI’s GPT-4, a startup that has gained significant attention in the field of AI.
Positive Market Performance of GOOGL Stock
In the stock market today, GOOGL stock experienced a slight rise, reaching close to $136. As the Google earnings report approaches, this large-cap tech stock has already witnessed a remarkable 53% gain in value since the beginning of 2023.
Editor Notes: Looking Ahead
This upcoming earnings announcement from Alphabet Inc (NASDAQ: GOOGL) holds immense significance for investors, analysts, and technology enthusiasts alike. The projected surge in earnings and the rebound of YouTube’s advertising revenue growth are key factors to watch. Additionally, updates on Google’s artificial intelligence initiatives, specifically the “Gemini” AI model, will provide insights into the company’s focus on AI development. Stay tuned to GPT News Room for the latest updates and analysis on this rapidly evolving industry.
Source: GPT News Room