GOOGL
📈 Alphabet showcased spectacular double-digit revenue growth and record operating income, demonstrating exceptional performance for a company of its scale.
☁️ Google Cloud is rapidly expanding, growing nearly 30%, and significantly boosting its profitability, marking key steps in diversifying revenue streams.
💰 Despite heavy investments in AI infrastructure, Alphabet maintains an attractive valuation (around 17x estimated 2025 net earnings) and returns value through significant share buybacks and initiating dividends.
@invertirdesdecasa:
“Alphabet’s market price closed around $162 per share on April 25th, with the company capitalizing at nearly $2 trillion. The analysis focuses on the entire company, as if the company is attractively priced, so is the stock. The earnings report was spectacular, showing double-digit revenue growth, which is brilliant for such a large company. Operating income hit a record for Q1 at over $30 billion, improving the operating margin to 34%. Net income grew almost 46% year-over-year, and EPS grew nearly 50%, faster than net income due to share buybacks. This net income growth was boosted by an $8 billion unrealized gain from its investment in SpaceX. Analyzing segments, Google Services (Search, YouTube) remains the core profit driver, but Google Cloud is growing much faster (almost 30%) and becoming significantly more profitable. Free cash flow has been pressured by rapidly increasing capital expenditures, nearly doubling year-over-year in Q1 2024, primarily for building data centers and AI infrastructure (requiring chips, servers, land, etc.). Despite high capex, dividend payments initiated in 2023 (growing 5%), and $70 billion authorized for share buybacks, Alphabet holds over $80 billion in net cash. Valuation-wise, estimating $115 billion in net earnings for 2025, the company trades at roughly 17 times net earnings, which seems attractive compared to historical levels and peers. Regarding the antitrust lawsuits, while the outcome is uncertain, a complete destruction of Alphabet is highly doubted. It’s more likely to result in negotiations, potentially involving commitments to invest more in the US, similar to Microsoft’s past experiences. The focus should be on the company’s long-term trajectory and potential growth, making current valuations appealing, especially if volatility presents lower entry points.”
Watch the exact part of the video where @invertirdesdecasa talks about Alphabet Inc. here:
Watch the video on YouTube
Read more articles analyzing Alphabet Inc. (GOOGL) at the provided link. GOOGL stock.
