Google Stock Slides As Cloud Business Was A ‘Big Disappointment’ In Q3 -

Google Stock Slides As Cloud Business Was A ‘Big Disappointment’ In Q3

Oct 25, 2023Jeremy ParkinsonFinance0

Image Source: Pixabay

Google reports solid growth for its third financial quarter.

CFRA analyst Angelo Zino discussed its earnings print on CNBC.

Google stock lost more than 6.0% in after-hours trading today.

Alphabet Inc (GOOGL) is down more than 6.0% in extended trading even though it reported solid growth on the back of an advertising rebound and continued cost cuts in its third financial quarter.Ad sales helped in the third quarterThe tech behemoth reported $59.65 billion in total advertising sales – slightly better than $59.2 billion that experts had forecast and significantly better than $54.5 million a year ago.YouTube ads in the recently concluded quarter brought in $7.95 billion versus $7.07 billion in 2022. On CNBC’s “Closing Bell: Overtime” CFRA analyst Angelo Zino said today:

Digital ad spend landscape is looking a lot healthier. As we go into 2024, there are still catalysts for digital ads: a major election and Olympics. Investors should continue to be excited about that.

CEO Sundar Pichai also revealed on Tuesday that “Shorts” – YouTube’s answer to TikTok now receives about 70 billion views per day versus just over 50 billion at the start of 2023.

Google’s Bard AI chatbot can now find answers in your Gmail, Docs, and Drive and complete tasks using the information in your Google tools.

You can now also easily verify Bard’s responses via Google. pic.twitter.com/Iian1g2QuN

— power.ai⚡️ (@powerai_) October 23, 2023
Why is Google stock down in after-hours?The tech stock is down in after-hours because Google Cloud revenue printed at $8.4 billion.While that figure represents a whopping 22% annualised growth – it was well below $8.6 billion that analysts had called for. According to Angelo Zino:

The growth rate in the cloud business was a big disappointment. It decelerated [sequentially]. Completely different from what we’re seeing from Microsoft.

Google Cloud swung to $266 million in operating profit in the third quarter versus $440 million loss a year ago. The multinational is currently up 40% year-to-date.

Google Cloud’s $GOOGL Revenue and Operating Income each quarter since Q4 2019 pic.twitter.com/3TqLgPsisK

— Evan (@StockMKTNewz) October 24, 2023
Notable figures in Google’s Q3 earnings release

Earned $19.7 billion versus the year-ago $13.9 billion

Per-share earnings also increased from $1.06 to $1.55

Total revenue jumped 11% year-on-year to $76.7 billion

Consensus was $1.46 a share on $75.96 billion revenue

Google saw traffic acquisition costs of $12.6 billion in its Q3 – roughly in line with expectations. CEO Sundari Pichai also said today in a press release:

We’re continuing to focus on making AI more helpful for everyone; there’s exciting progress and lots more to come.

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