Alphabet Investors, Google Stocks in Danger After Earnings Report

Google Stocks in Danger After Earnings Report

Google is in deep waters. After the company announced its earnings report, GOOGL stocks took center stage. Alphabet investors were once again disappointed with the company’s performance in the recent quarter.

The company’s shares immediately nosedived following the announcement yesterday during the market’s after hours. Alphabet Inc. steaks plummet by 4.09% or a staggering 60.60 during the after hours.

Google’s new Chief Executive Officer Sundar Pichai led the tech firms earnings report that its investors have long anticipated. The main culprit for the stock prices’ fall is the data on Google cloud services and YouTube.

The multinational conglomerate firm’s total earnings per share rose to 15.35 US dollars, topping forecasts of 12.5 US dollars prior.

Unfortunately, Alphabet A’s total revenue failed to meet Wall Street’s expectations. The California-based company’s fourth-quarter revenue only reached 46.08 billion US dollars, coming in short on the 46.91 billion US dollar projection.

GOOGL shares are the focus in the stock market this Tuesday, thanks to the report.

YouTube, the tech company’s video streaming unit, failed to generate significant figures in the fourth quarter of 2019.

According to Pichai, YouTube is pumping about 15 billion US dollars annually on its ad revenue. Unfortunately, that is still well below estimates of 25 billion US dollars.

Pichai then tried to counter the negative sentiment from the YouTube revenue by pointing out some of the firm’s latest units. Looking at it, yesterday was the first time Alphabet disclosed the size of the company’s different groups.

YouTube’s ad sales had only reached 36% from two years ago in 2018. And about 86% since 2017.

Gloomy Cloud

Another reason for the poor performance of GOOGL shares in stock trading during the after-hours is its cloud services.

The company’s cloud business reportedly pumped out about 8.92 billion US dollars in revenue for the whole of 2019. Then, in the fourth quarter alone, Google’s cloud generated approximately 2.61 billion US dollars.

The Google Cloud Platform reached 53% quarterly revenue growth. However, despite those digits reaching the billions, it, unfortunately, pales in comparison to its performance the year prior.

For comparison, Microsoft Corporation’s Azure reported a 62% quarterly improvement in sales the week before Google’s announcement.

According to official data, 2018 was the peak of the Google Cloud Platform, earning about 5.84 billion US dollars. Before that, in fiscal 2017, the cloud services generated 1.71 billion US dollars.

Google Cloud Platform is a computing service offered by Alphabet Inc. The computer application started back in April 2008, and it provides functions such as data storage and data analytics.

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