Google‘s parent company, Alphabet Inc. GOOGL, GOOG has regained its momentum, according to Wedbush Securities senior analyst, Dan Ives. He predicts a bright future for the tech giant, especially in the field of artificial intelligence.
What Happened: Ives, in an interview with Bloomberg TV, expressed his confidence in Google’s future, particularly in AI and advertising. He stated that the company’s “mojo” is back and that the tech giant is just getting started in the AI race. Despite the positive outlook, Ives acknowledged that Google still has a long way to go in the AI sector.
Ives highlighted that over the next 3, 6, and 9 months, Google will show significant progress not only in advertising but also in AI. He metaphorically described the AI landscape by saying, “It is 9 PM at the AI party, and we think it will go until 4 AM.”
He emphasized that Google is still in the early stages of the AI race, stating, “They are not even on the dance floor yet,” indicating there is still a long way to go for Google in AI development.
This comes on the heels of Google’s parent company, Alphabet Inc., reporting second-quarter revenue of $84.742 billion, surpassing the consensus estimate of $84.202 billion. The company also reported quarterly earnings of $1.89 per share, beating analyst estimates of $1.85 per share.
Why It Matters: Alphabet’s strong financial performance in the second quarter has been a focal point for analysts. Despite a sell-off in shares, analysts remain optimistic about the company’s future, particularly in generative AI. Alphabet’s revenue grew 14% year-over-year, driven by strength in Search and Cloud.
Jim Cramer has criticized the sell-off in Alphabet shares, arguing that those who listened to the earnings call would know the company is performing well. He attributed the sell-off to a “zeitgeist” and pressure on CEOs to reduce AI spending.
Additionally, some investors are concerned about the impact of higher AI-related capital expenditures on margins. Alphabet’s capex was $13.19 billion, which some see as necessary to secure the company’s future in AI.
Alphabet’s second-quarter earnings report also highlighted innovation at “every layer of the AI stack.” The company has now beaten analyst estimates on both top and bottom lines for six consecutive quarters, showcasing its resilience and growth potential.
Price Action: Alphabet Inc Class A shares closed at $172.63, down 5.04% on Wednesday. In after-hours trading, the stock inched up by 0.012%. Year to date, the stock has gained 24.94%. Meanwhile, Alphabet Inc Class C shares closed at $174.37, down 5.03% for the same day. In after-hours trading, the stock slightly increased by 0.046%, reaching $174.45, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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