Google: AI Leads The Way Higher

1
Comment
Favorite

Google: AI Leads The Way Higher

seekingalpha10-31

Google reported strong growth driven by AI, boosting Search advertising and Cloud revenue.The company smashed analyst estimates by $2.1 billion, with Cloud revenue growing 35% YoY, reaching an $11 ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment

No comments yet

Most Discussed

7x24

All

Terms and Conditions·Privacy Policy

Company: TTMF Limited. Tech supported by Xiangshang Yixin.

Email：uservice@ttm.financial

{"i18n":{"language":"en_US"},"data":{"share":"https://ttm.financial/m/news/2479673433?lang=en_US&edition=fundamental","thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1705780038/image_1705780038.jpg","is_english":true,"pubTime":"2024-10-31 00:38","share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","id":"2479673433","market":"sh","top_or_hot":-1,"title":"Google: AI Leads The Way Higher","media":"seekingalpha","content":"<div>\n<p>Google reported strong growth driven by AI, boosting Search advertising and Cloud revenue.The company smashed analyst estimates by $2.1 billion, with Cloud revenue growing 35% YoY, reaching an $11 ...</p>\n\n<a href=\"https://seekingalpha.com/article/4730920-google-ai-leads-the-way-higher\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Google: AI Leads The Way Higher</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nGoogle: AI Leads The Way Higher\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-31 00:38 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4730920-google-ai-leads-the-way-higher><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Google reported strong growth driven by AI, boosting Search advertising and Cloud revenue.The company smashed analyst estimates by $2.1 billion, with Cloud revenue growing 35% YoY, reaching an $11 ...</p>\n\n<a href=\"https://seekingalpha.com/article/4730920-google-ai-leads-the-way-higher\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0109391861.USD","symbol_name":"富兰克林美国机遇基金A Acc","start_time":0,"source_url":"https://seekingalpha.com/article/4730920-google-ai-leads-the-way-higher","article_id":"2479673433","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1705780038/image_1705780038.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2479673433","pubTimestamp":1730306310,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Google reported strong growth driven by AI, boosting Search advertising and Cloud revenue.The company smashed analyst estimates by $2.1 billion, with Cloud revenue growing 35% YoY, reaching an $11 bil","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0109391861.USD":"富兰克林美国机遇基金A Acc","LU0238689110.USD":"贝莱德环球动力股票基金","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU0187121727.USD":"FIDELITY SUSTAINABLE US EQUITY \"A\" (USD) INC","IE00BJJMRX11.SGD":"Janus Henderson Balanced A Acc SGD","IE00BN29S564.USD":"JANUS HENDERSON BALANCED \"A3\" (USD) INC","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0048573561.USD":"FIDELITY AMERICA \"A\" (USD) INC","LU0079474960.USD":"联博美国增长基金A","IE00BJTD4V19.USD":"NEUBERGER BERMAN US LONG SHORT EQUITY \"A1\" (USD) ACC","BK4592":"伊斯兰概念","BK4532":"文艺复兴科技持仓","LU0082616367.USD":"摩根大通美国科技A（dist）","LU0056508442.USD":"贝莱德世界科技基金A2","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","LU0080751232.USD":"富达环球多元动力基金A","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","LU0130518102.USD":"HARRIS ASSOCIATES GLOBAL EQUITY \"R\" INC","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","BK4525":"远程办公概念","LU0096362180.USD":"CT (LUX) I GLOBAL FOCUS \"DU\" (USD)","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","IE00B5949003.HKD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A\" (HKD) ACC","IE00BZ1G4Q59.USD":"LEGG MASON CLEARBRIDGE US EQUITY SUSTAINABILITY LEADER \"A\"(USD) INC (A)","BK4538":"云计算","LU0724617625.USD":"BGF GLOBAL ALLOCATION \"A4\" (USD) INC","GOOG":"谷歌","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","LU0106261372.USD":"SCHRODER ISF US LARGE CAP \"A\" ACC","GOOGL":"谷歌A","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU0061475181.USD":"THREADNEEDLE (LUX) AMERICAN \"AU\" (USD) ACC","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","LU0211327993.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (USD) ACC","LU0130103400.USD":"Natixis Harris Associates Global Equity RA USD","BK4561":"索罗斯持仓","BK4573":"虚拟现实","IE0034235188.USD":"PINEBRIDGE GLOBAL FOCUS EQUITY \"A\" (USD) ACC","IE0034235303.USD":"PINEBRIDGE US RESEARCH ENHANCED CORE EQUITY \"A\" (USD) ACC","BK4581":"高盛持仓","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","LU0029864427.USD":"TEMPLETON GLOBAL \"A\" (USD) INC","IE00B5TLWC47.USD":"BNY MELLON LONG-TERM GLOBAL EQUITY \"B\" (USD) ACC","IE00B4JS1V06.HKD":"JANUS HENDERSON BALANCED \"A2\" (HKD) ACC","BK4514":"搜索引擎","LU0128525929.USD":"TEMPLETON GLOBAL \"A\" (USD) ACC"},"translate_title":"谷歌：人工智能引领更高","themeId":"dc3840ac49f552a115af692a947f8447","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"GOOG":0.9,"GOOGL":0.9},"content_text":"Google reported strong growth driven by AI, boosting Search advertising and Cloud revenue.The company smashed analyst estimates by $2.1 billion, with Cloud revenue growing 35% YoY, reaching an $11 billion quarterly run rate.Despite one-time charges, Google beat EPS targets, trading at 22x forward earnings, cheaper than Apple, Microsoft, and Meta.The stock only trades at 17x adjusted EPS targets, making Google easily the cheapest stock in the mega tech sector.da-kuk  Alphabet Inc. (NASDAQ:GOOG), (NASDAQ:GOOGL), aka Google, just reported a strong quarter as AI led the way pushing search advertising and cloud revenue higher. The tech giant has traded at a discount in the last year, providing the opportunity for AI to contribute to growth, not destroying the search business as feared. My investment thesis remains ultra-bullish on the stock of an AI leader trading at a discount to other mega tech stocks. Source: Finviz Big AI Quarter Google smashed analyst estimates by $2.1 billion to return to nearly 15% growth in Q3'24 as follows: Source: Seeking Alpha The market was concerned about growth slipping to below 14% in the prior quarter with fears AI would eat into growth, leading consensus estimates to target Google only reaching 12% growth in Q3. The AI Overview portion of Search is leading to higher growth from more usage tied to AI vs. the fears of users going directly to ChatGPT for AI questions and bypassing Google. The tech giant saw strong growth in Search, reaching 12%, but the really strong growth came in Cloud at 35%. Source: Google Q3'24 earnings release Cloud gained nearly $3 billion in revenues YoY to top $11 billion. The business is now running at a $45 billion annual run rate and the growth is boosted by AI demand with the segment seeing growth slip back in 2022. Source: FinChat The Cloud business has become very profitable as well with a 17% operating margin, partly due to lower depreciation charges. Overall, Google has cut employees while adding revenues. The company grew revenues by more than $11 billion year-over-year in the process of cutting employees to improve efficiency. Confusing EPS Picture The whole earnings picture remains convoluted due to Google including one-time charges in the Q3 results plus the normal problems with Other income included in the EPS numbers. Also, Alphabet has now included a separate category for operating results called Alphabet-level activities with $3.2 billion in costs for the quarter. Source: Google Q3'24 earnings release In a way, this is the Reality Labs type spending account from Meta Platforms, Inc. (META), but the amount also includes company-level costs, including the $607 million incurred for office space charges. These total costs jumped $1.5 billion YoY and were mostly related to AI model building costs (or at least it appears that way). The company would be highly served to eliminate non-cash and one-time charges from the EPS number as follows:  $607 million in office space charges. $1.8 billion in net gain on equity securities. $5.8 billion in stock-based compensation charges.  In total, Google faced $6.4 billion in charges included in the financials and $1.8 billion in net benefits from equity gains for a $4.6 billion hit. The company beat EPS targets of $1.85 by $0.27, partially due to the $1.8 equity gains not easily modeled into EPS targets by analysts while the charges are generally modeled into analyst targets. Based on after-hours trading at $180, Google only trades at 22x forward earnings. The stock is the cheapest in the tech sector with both Apple Inc. (AAPL) and Microsoft Corporation (MSFT) trading at over 31x forward EPS estimates and even Meta trading at nearly 28x forward earnings. Data by YCharts The odd part is that Apple appears far behind in AI with iPhones just obtaining Apple Intelligence this week with the release of iOS 18.1. Google is already generating revenue boosts from AI while Apple is just now entering the game by using external AI models. As discussed in past research, stock-based compensation included in GAAP EPS targets actually makes the stock appear more expensive. Google is forecast to earn $8.70 per share in 2025 and the stock would see a nearly $2 boost from SBC charges approaching a $25 billion rate. Google only trades at 17x 2025 adjusted EPS targets of $10.70. The stock is exceptionally cheap with revenues back to growing at a 15% clip and signs AI will boost Search growth, not detract. The company even has $80 million in net cash with nearly $18 billion in free cash flow produced in the quarter. The stock would have an even cheaper enterprise valuation, but Google's valuation limits the boost from cash. Takeaway The key investor takeaway is that Google remains relatively cheap trading at $181 with a $2 trillion market cap. The tech giant is starting to see tangible benefits from heavy AI spending due to increases in Search ads and Cloud revenues.  Investors should use the current price to continue loading up on Google with the stock being the cheapest in the mega tech space. The stock continues to face the ultimate fears of superior AI features stealing market share from Search, but the company has successfully navigated this worst-case scenario.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"hasMoreComments":false,"newsSizeData":{"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}