Alphabet and Microsoft break record after Q3 2021 revenue

Alphabet CEO Thunder Pichai makes a gesture during a discussion on artificial intelligence at the Brugel European Economic Think Tank in Brussels, Belgium, on January 20, 2020.

Geert Vanden Wijngaert | Bloomberg | Getty Images

Share alphabet When Microsoft Both companies recovered to record highs on Wednesday after reporting third-quarter results that exceeded analysts’ expectations.

Despite a slight drop in the S & P 500 and the Dow Jones Industrial Average, stocks helped raise the tech-heavy Nasdaq Composite Index.

Alphabet surged almost 5% to $ 2,924.35, bringing its market capitalization to nearly $ 2 trillion. Microsoft rose 4% to $ 323.17.With a market capitalization of $ 2.43 trillion, software makers are approaching Apple Valuation of $ 2.46 trillion.

Despite concerns about inflation, supply chain constraints, and Apple’s privacy changes that limit advertising, the world’s most valuable tech companies continue to exceed growth expectations and prove their resilience to economic fluctuations. I have.

Google reported that advertising revenue increased 43% to $ 53.1 billion, and YouTube advertising revenue increased from $ 5 billion in the previous year to $ 7.2 billion. According to Refinitiv, earnings per share was $ 27.99, with analysts’ estimated earnings above $ 23.48.

Google was able to Blockbuster skirt This is due to changes in Apple’s iOS privacy, which negatively impacts quarterly results. snap When Facebook.. Ruth Porat, chief financial officer of Alphabet, said Apple’s new features had a “small impact” on advertising revenue.

Barclays analyst Ross Sandler said in a note Wednesday: “The advertising market remains strong, and unlike most digital peers, Google appears to be negatively impacted by iOS 14 and supply chain issues. No, “he said. “Long-term Google is one of our favorite names for the company in the best position in digital advertising,” writes Sandler, who has a stock purchase valuation.

Revenue According to Refinitiv, Microsoft’s first-quarter revenue increased 22% year-on-year to $ 45.3 billion, above the average estimate of $ 2.07.

Amy Hood, Microsoft’s chief financial officer, said the company’s improvements resulted in a 2 percent gross margin for the quarter, even without the impact of accounting changes extending the useful life of data center equipment. He said he expected it to rise. That cloud business.

Meanwhile, Microsoft’s PC-related business is overcoming bottlenecks in its global supply chain. The company reported 10% revenue growth in selling Windows licenses to device makers.

“Microsoft has overcome two important concerns: PC exposure and margins,” a UBS analyst with a stock buy rating wrote in a memo after the earnings report.

Investors are bullish on Google and Microsoft’s growth prospects, but both have indicated potential challenges for the future. Inventories have increased by 83% and 51% over the past year, respectively.

Hood told analysts about Microsoft’s call to “watch the advertising market,” as companies hurt by supply problems may be less willing to spend.Search and news advertisement It accounts for about 6% of Microsoft’s revenue.

Google warned that growth rates wouldn’t be as rosy as they were in the last few periods. Second quarter..

“Given the gradual recovery and results by the second half of 2020, the benefits of wrapping the previous year’s performance diminished in the third and second quarters, and in the fourth quarter, Polat said in a conference call on Tuesday. It will decrease further. “

Analysts expect revenue growth to slow in the first half of 2022. Low rate On Google Play Store and regulatory issues.

look: Alphabet is good at deploying apps and services to consumers, says Baird’s Sebastian.

Alphabet and Microsoft break record after Q3 2021 revenue

Source link Alphabet and Microsoft break record after Q3 2021 revenue

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