Stock & Indices

Alphabet’s earnings preview | Q3 2022

Hot Forex Review

Alphabet’s GOOGL third-quarter 2022 earnings due to release on Tuesday, October 25, after the market close.

Even if it is going to be lower growth, but still expectations are optimistic about google’s earnings. The analyst’s consensus estimate for EPS is $1.25, compared with $1.40 in Q3 FY 2021. By market capitalization, Alphabet (Google) Inc. is the third-largest tech company, and this slower expected growth for the third quarter can increase the expectations for the economic recession. On the other hand, revenue by an 8.7% increase to $70.8 billion can change the outlook for future growth expectations.

Google Cloud at the center of attention

As with many other tech companies, its income directly depends on the advertisement. Therefore, we have to watch two main factors to set our expectations. First of all, overall global economic growth. As fast as economic growth, businesses will need more services, including the advertisement, and vice-versa. Thanks to YouTube which generated $29 billion in ad revenue for 2021, Alphabet has been a leader in the advertisement business. However, they have to watch the threat from TikTok ad sales a bit more seriously.

In addition, Alphabet has been investing so much in Google Cloud, and now it is one of the main income sources for the company. Cloud revenue was $6.3 billion in the second quarter of 2022, which was almost 9% of total company revenues with 35.6% annual growth. For this quarter, the Zacks Consensus Estimate for Google Cloud revenues is pegged at $6.7 billion, a 34.9% growth from the same quarter year ago.

Besides Google Cloud, other important segments to watch are advertisements, search engines, and google network.
From the technical point of view, as we can see in the below daily chart, Google’s share price turned to a positive attitude. However, the current return after a long-term decline will need more confirmation to become a stable uptrend. If the share price can breathe the 106 and 112 USD, then it can turn to a short-term uptrend with the next target around 120 USD. On the flip side, a negative report with more pressure on the stock markets will put the $92 on radars.

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