Important points
- Google’s parent company, Alphabet, is scheduled to report first-quarter 2024 earnings after the closing bell on Thursday.
- Analysts expect Alphabet’s revenue and profit numbers to increase from the year-ago period but decline from the previous quarter.
- The tech giant is set to report Google Cloud earnings, with investors eyeing sustained growth.
- Google is expected to provide an update on its efforts in artificial intelligence (AI) after unveiling its own custom AI chip.
Google parent Alphabet (GOOGL) is scheduled to report first-quarter 2024 earnings after the closing bell on Thursday, with analysts offering updates on continued cloud growth and artificial intelligence (AI) efforts. is paying attention to.
Analysts expect Alphabet’s revenue to be $78.79 billion in the first quarter of 2024, down from the previous quarter but higher than the same period in 2023, according to estimates compiled by Visible Alpha. That’s up from $69.79 billion.
Net income is expected to be $18.89 billion, down from the fourth quarter but up from $15.05 billion in the first quarter of 2023. Earnings per share (EPS) are expected to be $1.51, compared with $1.17 in the prior-year quarter.
| Analyst forecasts for Q1 2024 | Q4 2023 | Q1 2023 | |
| revenue | $78.79 billion | $86.31 billion | $69.79 billion |
| Diluted earnings per share | $1.51 | $1.64 | $1.17 |
| Net income | $18.89 billion | $20.69 billion | $15.05 billion |
Key metrics: cloud growth momentum
Investors are focused on Google Cloud’s continued growth, as the Google Cloud division’s revenue surged in the final quarter of 2023 after minimal growth.
Google Cloud’s revenue rose more than 25.5% year over year to $9.2 billion in the fourth quarter of 2023, allaying investor concerns about the sector’s stagnation.
With Google’s cloud growth returning to a 25% growth pace in the fourth quarter, CFRA analysts said, “We believe cloud revenue will grow at least 25% and expect that level to be maintained through 2024. I predict that.” “Margins will also be important, as GOOGL has failed to cut costs as aggressively as other Big Tech companies,” he added.
Analysts at Bank of America expect cloud revenue to remain at $9.34 billion in the first quarter, and strength in the sector with higher quarter-on-quarter margins could benefit Alphabet. It is written that there is a sex.
Alphabet, whose market cap approaches $2 trillion, announced several projects and updates at its Cloud Next conference earlier this month.
Business focus: AI updates
Google may also give investors an update on its AI efforts as major tech companies stake their claim in the AI boom.
Alphabet is doubling down on its AI efforts, announcing the Google Axion processor, a custom Arm-based (ARM) chip designed for data centers.
Hyperscaler, leading technology giant in the AI era, has introduced in-house custom chips to help control costs while reducing dependence on Nvidia (NVDA). Microsoft (MSFT), Amazon.com (AMZN), and Meta Platforms (META) also announced custom in-house AI chips.
CFRA analysts “see increasing opportunities related to AI monetization” for the company through cloud, search, YouTube and Google’s other businesses.
Analysts at Bank of America say, “Although the use of AI certainly poses long-term competitive risks for Google, by 2024 Google (and its peers) could see improved monetization from AI.” “AI is a tailwind for Google,” he said.
Alphabet stock is up more than 10% so far in 2024 to Friday afternoon’s level of $155.54.
