Google-parent Alphabet (GOOGL) issued a first-quarter earnings report for 2022, which missed the targets of Wall Street. GOOGL stock dropped as YouTube advertising growth recorded well short of expectations following increasing competition with TikTok.
Alphabet said after closing the market that the first quarter of 2022 earnings declined 6% to $24.62 per share. Google reportedly experienced a $1.07 billion loss on equity investments, which decreased 99 cents per share profit. The search giant is also known as GAAP (generally accepted accounting principles).
However, the gross profit increased 23% to $68.01 billion. Experts earlier predicted $25.74 per share Google earnings on revenue of $68.05 billion. Today, GOOGL stock declined 4.4% to around 2,268 in the extended trading on the stock market. The search giant said that cloud-computing revenue boosted 44% to $5.82 billion than the $5.73 billion estimations.
TikTok Ad Growth and YouTube Ad Revenue
Moreover, the advertising revenue of YouTube increased to $6.87 billion. Most analysts had also estimated the ad revenue of YouTube at $7.21 billion. The advertising growth of TikTok has been boosted by its effectively targeted short-form videos. Analysts said it is also posing a threat to the growth of YouTube.
The search giant said net revenue excluding traffic acquisition costs was recorded at $56.02 billion compared to the estimated $56.26 billion. Google pays to maintain traffic directed to its websites is called the traffic acquisition costs. It has boosted 23% to $11.99 billion and outpaced the estimation of $11.69 billion. However, Google’s board of directors has granted around $70 billion in additional stock purchasing.
Google Shares dropped 17% in the first quarter of 2022
The search giant purchased around $13 billion of Google stocks in the first quarter of 2022. The company purchased $13.5 billion of stock in the 4th quarter and $12.6 billion in the 3rd quarter of 2021. The Chief Financial Officer of Alphabet, Ruth Porat made a statement in the earnings release.
The company is continuously making considered investments in R&D, Capex, and Talent to help stakeholders in creating long-term value. The report said that stock had dropped 17% in the first quarter of 2022 following vaporization in the Nasdaq. Moreover, GOOGL stock sustains an RSR (Relative Strength Rating) of 58 out of the best possible 99.
Microsoft Stocks have shown a Powerful Growth
It is important that first-quarter results for Microsoft stocks have shown a continuous journey towards powerful growth. However, the fiscal 3rd quarter (ended in March) results are yet to be announced after Tuesday’s trading close. Most analysts are now expecting another remarkable performance. It would follow a considerable demand for cloud-based computing and an extraordinary spending increase in enterprise IT.
Moreover, investors will supposedly find the latest information on the unsettled $68.7 billion investment of Activision Blizzard of the company. The stock is continuously trading at a sensitive discount to the bid price. Wall Street estimated in the report for Microsoft (MSFT) revenue of $47.5 billion. It is around 18% up from last year’s $1.95 with an increase of $2.19 per share.
Microsoft is expecting revenue from its Productivity and Business Processes segment. It includes Office and other applications between $15.6 billion and $15.85 billion. Moreover, the Intelligent Cloud segment includes the Azure cloud business of the company. The projected revenue for the company is estimated between $18.75 billion and $19 billion.