Google spends big on the AI future
Alphabets second-quarter profits topped estimates as parent company Google showed strong growth in its advertising and cloud computing divisions but investors were wary around increased spending on AI – a potential theme through earnings season. The stock was up ~2% afterhours.
- 2Q revenue of $81.72 billion, was +15% YoY beating estimates of $79.6 billion.
- 2Q EPS of $2.31 v $1.89 YoY beat estimates of $2.18.
- EBIT of $32.27 billion was +14% YoY, beating estimates of $31.07 billion.
- Capex was flagged to increase by 13%, around $US10bn above expectations, to around $US85 billion.
This is a phenomenal result for Google and while the increased Capex guidance will have some pulling back their numbers, the opportunity is now in AI and what they are doing is gaining great traction, so why not do more of it!
We can see GOOGL making new highs this year, and is a stock we are likely to back over the medium to long term: MM holds GOOGL in the International Equities Portfolio.
MM is long and bullish towards GOOGL
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