What to expect when Alphabet, FANG’s ‘true blue chip,’ reports earnings

01.02.2018 / 14:47

Rating:

Google parent company Alphabet is set to report earnings on Thursday after the bell, and the market will be watching several key factors.

The stock has been on a tear, up 12 percent year to date and 44 percent in the last 12 months. Here's what to look for.

How's business?
Alphabet has beaten Wall Street's revenue estimates three out of the last four quarters, so top-line growth is going to be key. Remember, 85 percent of all revenue still comes from advertising, but cloud computing and hardware are now 15 percent of revenue and growing quickly.

The market will want to see how sales from home speakers fare and how well the Google Cloud Platform is doing.

Artificial intelligence impact
One thing is clear: Alphabet's big bet is on artificial intelligence.

It is, unquestionably, the best in that space. Google Assistant is the most accurate consumer product on the market, but investors will want to know how Alphabet is looking to monetize this lead.

The competition
Increasingly, it is Amazon — not Apple or Facebook — proving to be Alphabet's true competitor, particularly as Amazon moves further into the internet advertising business. It will be interesting to see how the company responds to several unexpected challenges on this front.

Overall, Alphabet is the true blue chip in the so-called "FANG" quartet of tech giants, and I expect business growth to be steady and come in within estimates. Still, increasingly, investors will focus on growth in its non-core businesses, such as hardware, cloud computing, artificial intelligence and the "internet of things" for clues as to the next stage of growth in the company.

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov

Varchev Traders

Read more:

RECCOMEND WAS THIS POST USEFUL FOR YOU?
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.

WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.

Varchev Finance

Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.

Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006

The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Disclaimer:

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

What to expect when Alphabet, FANG’s ‘true blue chip,’ reports earnings

London

Universal numbers