Bulls Look to Alphabet Results to Keep Tech Stock Rally Going

Bulls Look to Alphabet Results to Keep Tech Stock Rally Going

Bulls Look to Alphabet Results to Keep Tech Stock Rally Going

Revenue-wise, Alphabet is still an advertising company, despite its investment in cloud and other business. Revenues in the US rose 20 percent while revenues from Europe, the Middle East and Africa jumped 29 percent due to the stronger euro and British pound. The company's net income for the most recent quarter was $8.9 billion.

Google parent Alphabet delivered a better-than-expected holiday quarter earnings report on Monday, with some asterisks: The company's numbers for the quarter benefitted from a one-time cash injection.

Annual revenue growth shrank by two-percent for the period compared to past year but revenue rose by 21.5-percent moving from $32.323 billion to $39.276 billion.

Google is asking investors to trust that investments in future growth will pay off, but the company discloses limited financial details on its newer initiatives.

Cost per click, which somewhat measures the amount Alphabet charges advertisers for each ad served on its web sites, plummeted 29 percent from 2017 and 9 percent from Q3. For the latter, much of the cost jump over the year was from fiber cable rollouts - Google has an very bad lot of private fiber - while the ad giant also invested in, among other things, data centers and the hiring of more sales and research workers.

Google grew headcount to 98,771 at the end of the year, up from 80,110, with most of the growth coming in engineers and product mangers, and most of that in cloud.

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We continue to invest in both compute requirements and for office facilities.

Alphabet said its Q4 results slightly surpassed analyst expectations. On its earnings call, Google CEO Sundar Pichai said its cloud business was "one of the fastest growing businesses across Alphabet", but that's likely a function of how small it is - if I'm earning a dollar a day and then I start earning two dollars a day, I've increased my earnings by 100 percent.

Yet, the biggest issue for Google right now might not be regulatory risks so much as its own ongoing effort to diversify its revenue streams amid competition from other large technology companies.

Alphabet's Google search engine is the digital world's most lucrative advertising business, and it was slapped with a $57 million fine last month by French authorities. However, those operations showed a $1.3 billion operating loss.

Late past year, Google brought in former Oracle Corp. executive Thomas Kurian to lead its cloud business into what it hopes to be a rapid growth stage. Other bets lost $1.3 billion, up a whopping 78 percent over the 748 million the group lost a year ago.

'Acquisitions are an attractive complement to what we do to drive organic growth.

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