To The Moon

My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?

"Why not both" I asked myself ?

Wouldn't there be more upsides comparatively speaking ?

Having put the theory to test on different companies type (see below for details); time to try it on another FAANG stock ?

Let's put $Alphabet(GOOG)$ to the test & see if it fits the bill.

Sidetrack: Below are stocks that I have covered.

Click to read, if interest. Please "Like" as well to show some love okie ? Thanks !

• T-Mobile 
• Chipotle Mex Grill 
• Amazon 
• McDonalds Inc 
• United Parcel Service (UPS)
• Apple Inc
• Spotify Inc
• Meta Platform (Facebook)
• AMD Inc
• Snap Inc
• Lam Research (semicon)
• General Motors
• Visa Inc

• An American multi-national company
• It was founded on 04 Sep 1988 (a young company !)
• Founders were Larry Page and Sergey Brin; 
• They were PhD students at Stanford University in California
• It was listed on Nasdaq on 19 Aug 2004 at $85 per share
• On the list of most valuable brands, Google is ranked 2nd by Forbes
• In addition to its products-rich offerings (see below table); Alphabet is branching into non-IT specialities eg. (1) Quantum computing (Sycamore), (2) Self-driving cars (Waymo, formerly Google Self-Driving Car Project), (3) Smart cities (Sidewalk Labs), & (4) Transformer models (Google Brain)

In 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did Alphabet (Google) fare ?

Current stock price < 7 Feb 2022 stock price by -26.08%

Alphabet (Google) - Summary

• Revenue came in at $76.04 Billion vs $75.32 Billion (Q4 2021) vs $76.53 (Refinitiv expectations); thats a +0.96% gain
• Net Income (GAAP) came in at $13.62 Billion vs $20.64 Billion (Q4 2021); thats a -34% decline.
• Earnings per share (GAAP) was $1.05 vs $1.53 (Q4 2021) vs $1.18 (Market expectations); thats a -31.37% decline
• Operating Income came in at $18.2 Billion vs $21.89 Billion (Q4 2021); thats a -16.86% decline

Alphabet (Google) - Revenue by Segment Details

• Alphabet is a collection of businesses — the largest of which is Google.
• For financial reporting, Google is further segregated into two segments, Google Services & Google Cloud.
• For all non-Google businesses, they would be reported collectively as Other Bets
• Like any social media apps, the bulk of the revenue comes from its digital advertising dollars that includes (a) YouTube ads, (b) Search ads and (c) Network ads.
• For Q4 2022, advertisers' dollars have declined by -4%
• On the other hand, its Cloud services have grown by +32% to $7.3 Billion. FYI, Alphabet's Cloud infrastructure ranks #3 worldwide; after Amazon Web Services & Microsoft's Azure.

Alphabet (Google) - Revenue by Geographical regions

• In Q4 2022 both US and South America managed to grow its bottom line by +6% & +5% respectively.
• Conversely, both (Europe,Middle East & Africa) and Asia Pacific have registered -6% respectively.

Alphabet (Google) - Past revenue 

• Its safe to conclude that 2021's revenue is "exceptional" due to the sharp surge in internet usage caused by the pandemic
• In 2022, when the Fed commenced quantitaive tightening (QT) and 7 rounds of interest hikes these monetary policies resulted in contractionary reactions as advertisers reduced its budget. 
• The gradual tear down of pandemic restrictions worldwide also led to less usage & dependency on services rendered by Alphabet.

Alphabet (Google) - Other Highlights

• Like other FAANG stocks whose "cost & expenses" increased by mutli-folds, Alphabet (Google) was no exceptions
• With a +8% expenditure increase, its costs totalled $57.9 Billion.

Alphabet (Google) 's CEO on Q4 2022 Results

“It’s clear that after a period of significant acceleration in digital spending during the pandemic, the macroeconomic climate has become more challenging... Alphabet CEO Sundar Pichai

Is Alphabet (Google) A Good Price and Good Company ?

Returns comparison amongst GOOG vs S&P 500 vs Nasdaq

• If a stock's history is a "mirror" of its stock price in the future, then above diagram has clearly shown that Google stock price has stayed above both S&P 500 and Nasdaq. 
• Alphabet is relatively more insulated than other ad-reliant platforms from the effects of a potential recession and Apple’s ATT privacy policies
• Google has several big opportunities to increase revenue and to extract more efficiency from its business by bringing machine learning to its fleet of services.
• Google cloud platform has machine learning (ML) built in.
• That same ML can be used to wring more efficiency from the company’s data servers, and will be incorporated into Gmail and other Google products
• The ML tech is also "baked into" Google’s Performance Max ad product
• Despite Youtube's sluggish Q4 2022's stats, it remains a monster growth engine. 
• In Q3 2022, it was reported that YouTube Shorts (Tik Tok's rival) were generating more than 30 Billion views per day. 
• Fast forward 3 months into Q4 2022 - ouTube Shorts is up to 50 Billion views per day.
• YouTube has a chance to become a more shoppable platform, although still in nascent, but lots of potential in making it easier for people to shop from the creators, brands and content they love.
• Alphabet is right-sizing its business to prepare for any anticipated slowdown with cost-cutting initiatives that includes reducing its global headcount by 12,000 employees
• The aggressive measures could boost the company’s bottom line in 2023 by as much as 1.5 to $2 Billion.

• Do you think Alphabet (Google) still has what it takes to become #1 again ?
• Do you think Alphabet is the best of the FAANG stocks ?

Please "LIKe" this post ok. Thanks. The rating is very important to me !

@TigerStars 

@CaptainTiger 

@MillionaireTiger 

@Daily_Discussion 

@Tiger_SG 

@TigerPM