Google stock: Shares fall as Google earnings beat, cloud computing growth falters

Google Parents letters (Google) third-quarter earnings topped consensus estimates, while revenue rose by views. GOOGL stock fell on Wednesday as cloud-computing sales growth in Q3 failed amid an apparent loss of market share. Microsoft (MSFT) on the battle of artificial intelligence.




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After the market closed on Tuesday, Google’s earnings for the quarter ended Sept. 30 rose 46% to $1.55 a share.

In Q3, Google’s total revenue rose 11% to $76.69 billion.

Tech giant Google reports earnings under generally accepted accounting principles known as GAAP. Analysts had forecast EPS of $1.46 on revenue of $76 billion.

Google Stock: Cloud Growth Misses

Google said cloud computing revenue rose 22% to $8.41 billion, missing estimates of $8.64 billion. Google’s cloud computing business reported 28% growth in the June quarter.

“Google Cloud appears to have given Microsoft Azure market share,” KeyBanc Capital Markets analyst Justin Patterson said in a statement.

Microsoft’s cloud computing revenue rose 24% to $31.8 billion in the September quarter.

Microsoft is the largest investor in artificial intelligence startup OpenAI. Microsoft’s cloud customers are building applications using OpenAI’s foundational models.

“While Google’s cloud miss raises concerns over AI positioning, Google’s quarter suggested some stabilization and cloud accounted for just 2% of gross profit,” Bank of America analyst Justin Post said in a statement.

Amazon Web Services, in part Amazon.com (AMZN) is the largest provider of cloud computing services. Amazon reports Q3 earnings on Thursday.

In the stock market today, GOOGL stock fell 6.2% to 130.18 in early trade.

Also, Google’s Q3 ad revenue rose 9% to $59.6 billion. An estimated $59.1 billion.

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GOOGL Share: YouTube Rebounds

Meanwhile, YouTube ad revenue rose 12% to $7.95 billion. Analysts estimated YouTube ad revenue at $7.82 billion.

At market research firm Insider Intelligence, analyst Max Willens said in a statement: “Cloud computing is a tougher business than advertising, and Google faces tough competition. Its traction among AI startups could pay off in the long run, which is enough to satisfy investors for Google Cloud right now.” Didn’t help.”

RBC Capital analyst Brad Erickson said in a statement: “Google took a modest hit on the top-line, driven largely by search and, to a lesser extent, YouTube, partially offset by a small miss from cloud and networks.”

Google stock buyback

At Evercore ISI, analyst Mark Mahaney said in a statement: “Our best interpretation is that, as a secondary cloud for many customers, Google Cloud may begin and end with cost optimization over Amazon Web Services.”

In Q3, capital spending came in at $8.1 billion, missing the consensus estimate of $9.1 billion. Also, Google repurchased $15.78 billion of its own stock, the same as in the June quarter.

Google’s Q3 traffic acquisition spending rose 7% to $12.64 billion. Fees related to Google’s web search Apple (APL) is a key issue in the Justice Department’s antitrust case against Alphabet.

Alphabet shares surge 55% in 2023 after Google earnings report

Also, GOOGL stock has a relative strength rating of 95 out of an excellent possible 99. IBD Stock Checkout.

Follow Reinhardt Krause on X, formerly known as Twitter, @reinhardtk_tech For updates on 5G wireless, artificial intelligence, cyber security and cloud computing.

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