To The Moon

Alphabet, the parent company of Google, announced after the U.S. stock market that the revenue growth rate in the third quarter was lower than market expectations, with a revenue of 69.1 billion US dollars, with a quarterly increase of only 6.1%. In addition, the profitability has declined significantly. Compared with last year's decline of 27%, the amount is only 1 $3.9 billion means that the situation in the digital advertising industry is slowing down due to the bad environment. In fact, I'm not too surprised that my performance is not as good as expected, because I think the current prosperity, coupled with other social media that relying on advertising revenue before, are basically struggling, and the previous performance in the COVID-19 period was too high. Under the base period, it is very good to surpass the previous "unusually good" performance. Difficult.

YouTube revenue fell by about 2% from $7.21 billion to $7.07 billion. In order to view this correctly, analysts expect to grow by at least 3%. This is the first decline since Google began. Search advertising sales increased by 4% to $39.5 billion. The market is expected to earn 41 billion US dollars. I think Alphabet's share price fell by about 6% after the session. I should be worried about this, but I think it's good. Although it doesn't meet expectations, I expect meta to be more affected. I think under the circumstances of a strong dollar and economic slowdown, it may be more difficult to operate next year, and advertisers have also begun to "shrink their hands" and do not give too much budgets on advertising.

If we open the business to observe, its three major businesses are core advertising, search business, Android system and Chrome browser, hardware, Google Map, Google Pay, Play Store and YouTube. The revenue and profit of the service business including the video platform are lower than expected. Formerly known as the scientific and technological innovation department, including the self-driving start-up Waymo, AI DeepMind, AI Medical Verily and other "other bettings" revenue is also lower than expected, and the loss is higher than expected. Period. Only the income and loss performance of cloud business in the third quarter was better than expected.

Basically, I am quite satisfied with Alphabet's performance this quarter, but we invest in the future. My outlook for Alphabet next year is not so optimistic. Although its impact may be smaller compared with other competitors, I personally think it is still a little biased in terms of valuation. High.

Then in fact, I don't know if you have noticed that Amazon, Google and Meta have also closed a lot of money-making businesses in the past year. In this difficult period, everyone eliminates loss-making companies as much as possible, and then do a good job in cost control and try to maintain profits. I think this is a wise decision, because after the cold winter, the market will resume growth, and the overall margin of large companies after losing weight will be stronger than before. Moreover, they have huge cash flow, and they may be able to buy ready-made small and medium-sized enterprises to achieve their goals, but many small companies that lose money may not be able to survive this cold winter due to lack of funds.

$Alphabet(GOOG)$