Investors were wary of the profits of large technology companies. All eyes have been on technology gains as the sector has helped propel the market higher and investors want to know if it holds up.
google parent Alphabet just reported its Q2 results and the tech giant did not disappoint. After the stock fell 2% during the regular session, the stock is up about 3% in longer hours trading.
Beat the Street
Investors celebrate Alphabet for beating estimates on the top and bottom lines. The company reported earnings per share of USD 27.26 versus estimates of USD 19.34. Meanwhile, revenue came in at $61.88 billion, with Wall Street analysts asking for about $56 billion. With a massive market cap of $1.79 trillion, Google/Alphabet is growing at a pace akin to a tech unicorn.
Google and Alphabet CFO Ruth Porat declared:
“Our strong second-quarter revenue of $61.9 billion reflects increased consumer online activity and broad strength of advertiser spend.”
Race on ad revenue has begun
Online advertising is booming as companies are retaliated to spend money on internet advertising now that the economy has officially reopened. Companies like Snap Inc. already reported robust ad revenue for the second quarter, leading Alphabet to take over. Now the race is over.
Google’s online ad revenue grew nearly 70% in the second quarter from a year ago to USD 50.4 billion. YouTube’s ad revenue alone was $7 billion, an 84% year-over-year increase and surpassing Wall Street’s estimates.
Google Cloud revenue came in at $4.63 billion, also better than expected. Google has invested in artificial intelligence and the cloud. Alphabet also recently received the green light for a $50 billion share repurchase program of Class A and Class C shares.
If technology stocks continue to do their magic, they may be able to hold the market higher on Wednesday and beyond.
The gains in Alphabet’s stock follow a bullish performance in which the stock is up 50% so far this year. Meanwhile, tech giants Microsoft and Apple also reported gains after the bell, but both stocks move lower in after-hours trading.
Investors should note that the strong market for online advertising sales is expected to continue. GroupM is Reportedly forecasts global ad sales to reach USD 749 billion in 2021, a double-digit increase from a year ago. Technology stocks like Alphabet may continue to benefit from this trend.
This one article was originally posted on FX Empire