When you think about social media, Google or Alphabet may not be the first name that pops up. One would most likely envision the popularity of Facebook, Instagram, and maybe Tik Tok. It‘s safe to mention that Meta’s Facebook is the world‘s most popular social media platform, with over 2.9 billion active users. In second place, Alphabet’s YouTube. Alphabet is comfortably the largest company in the world which owns/operates social media networks, applications or platforms, with a market capitalization of $1.766 trillion.
YouTube, the worlds most popular video-sharing platform, has over 2.3 billion global active users, and that number keeps growing day after day. Alphabet is renowned for its innovative capabilities, and introducing YouTube shorts in July 2021 was one of its greatest decisions, as it capitalized on the growing trend & popularity of short videos.
Recent Performance
Alphabet is the ultimate example of a mother company which has it all and cant get enough. The multinational technology conglomerate is the parent of Google, Nest, YouTube, and most recently, cybersecurity-focused Mandiant. How has Alphabet been performing the past two quarters？
In the third fiscal quarter of 2021, Alphabet topped Wall Street estimates in profits, earnings per share and revenue. The company reported earnings of $27.99 per share, against the $23.48 expected. With regards to revenue, the company generated $65.12 billion, which is $1.78 billion more than forecasts. While it was a great quarter for the firm, YouTube & Google Cloud revenue was slightly underwhelming.
According to CEO Ruth Porat, Apples privacy changes, which were put in place on iOS 14 in April of 2021, had a “modest impact on YouTube revenues”. The privacy changes allowed users to opt out of targeted ads. While Google was affected, it was not adversely impacted as much as rivals like Facebook & Snapchat, as Google owns the Android operating system.
Now, in the latest quarter, Alphabet strongly trumped expectations. Earnings per share (EPS) were $30.69 versus the $27.34 expected, and revenue was $75.33 billion against the $72.17 billion forecasted. While YouTube revenue was slightly below predictions, Google Cloud has broken the barrier & generated $5.54 billion in revenue; $0.07 billion more than projections.
Technical Analysis
Looking at the Alphabet (NASDAQ: GOOG) stock from a technical perspective, the long-term trend is positive, but the short-term trajectory appears to be negative. The stock, currently priced at $2,680 per share, is trading between support levels lying at $2,530 and $2,600, and resistance levels of $2,750, $2,870 and a higher one at $3,024. As the stock is currently on a downward trajectory, it is best to wait for a more suitable point of entry for stock purchase.
Future Expectations
We can expect a lot from Alphabet in the coming days. As YouTube shorts is gaining momentum and impulse, the short-video-sharing platform is likely to continue generating heaps of revenue. As advertising is Alphabets main source of revenue, the conglomerate is benefiting greatly from the increasing usage of its video-sharing social media platform & and Google Search.
Alphabet has also announced that it shall initiate a 20-for-1 stock split, which is likely to go into effect in July of this year. Such initiative can attract more investors towards the Google stock, with stock splits regarded as great signs of the companys confidence in its future growth.
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