Shares in Google-parent Alphabet jumped Wednesday after the internet giant posted better-than-feared June quarter results. Revenue growth at the core digital advertising business of GOOGL stock edged by views, though earnings and revenue missed.
Google's advertising revenue tied to internet search seems resilient, analysts say. Search-related ad revenue rose 14% year-over-year, topping estimates.
"Search continues to be resilient given large number of advertisers and performance nature of ads," said Oppenheimer analyst Jason Helfstein in a report.
Alphabet reported second quarter earnings after the market close on Tuesday. Google said second-quarter earnings fell 11% to $1.21 per share. The company reports earnings under generally accepted accounting principles, also known as GAAP.
GOOGL Stock: Currency Exchange Rate Hit
Also, gross revenue rose 16% to $69.7 billion. Google said currency exchange rates lowered revenue by 4.3% or nearly $2.7 billion.
Analysts had predicted Google earnings of $1.27 per share on revenue of $69.62 billion. A year earlier, Google reported earnings of $1.36 per share on revenue of $61.9 billion.
Meanwhile, advertising revenue rose 11% to $56.29 billion, edging by estimates of $55.97 billion.
GOOGL stock jumped 7.7% to close at 133.06 on the stock market today.
"Up against a wall of worry, Google posted surprisingly solid Q2 EPS results, with revenue largely in-line with street estimates," said Mark Mahaney, analyst at Evercore ISI in a report. "Operating income missed the street by 3% while ad revenue, primarily search, came in slightly ahead of expectations and YouTube and Cloud both slightly missed. "
Google Stock: TikTok, YouTube Competition Heats Up
However, YouTube revenue rose only 5% to $7.3 billion. Analysts had estimated YouTube ad revenue of $7.52 billion, up 7%. YouTube's sales growth slowed from 14% in the first quarter.
Social media firm TikTok's advertising growth has boomed via its short-form videos. TikTok poses a headwind to YouTube's growth, analysts say.
Google said cloud-computing revenue rose 36% to $6.28 billion, missing estimates of $6.41 billion. The cloud unit's operating loss increased to $858 million from $591 million in the year-earlier period.
Alphabet repurchased $12.8 billion of its own stock in the second quarter. In the first quarter, the company repurchased $13.3 billion of Google stock.
The big tech stock had shed 19% in 2022 amid volatility in the Nasdaq. Google stock sold off July 22 after Snap reported disappointing earnings on weak advertising.
"While Snap's Q2 print and Q3 outlook last week spooked investors, Alphabet's Q2 results highlight that marketers are perhaps migrating to platforms with the most scale," said Deutsche Bank analyst Benjamin Black in a report.
GOOGL stock holds a Relative Strength Rating of 35 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
