Alphabet (NASDAQ: GOOG, GOOGL) is scheduled to announce Q2 earnings results on Tuesday, July 27th, after market close.
Analysts expect rapid growth in both earnings per share (EPS) and revenue, with revenue growing at its fastest pace in at least four years.
Investors will also be focusing on revenue for Google Cloud, one of Google’s main business segments. Google Cloud offers tools for developers through a cloud platform as well as other workplace collaboration tools. Analysts expect Google Cloud revenue continues growing at a robust pace.
Alphabet’s shares have outperformed the broader market over the past year. For the first part of the last year, the stock mostly kept pace with the rest of the market. But beginning around mid-January 2021, the stock began to break ahead of the market. The outperformance gap has gradually widened ever since. Shares of Alphabet has provided a total return of 75.4% over the past year, more than double the S&P 500’s 36.4% total return.
As mentioned above, investors will also be focused on Google Cloud revenue. Google Cloud is one of Alphabet’s primary business segments. The cloud segment provides developers with a highly scalable and reliable platform for building, testing, and deploying applications. It also offers workspace collaboration tools, including apps like Gmail, Docs, Drive, Calendar, Meet, and more. Revenue is generated through the collection of fees related to those services. As of the end of the first quarter of 2021, Google Cloud had an estimated 9% of the $150-billion global cloud market, ranking it third behind Microsoft Corp.’S (MSFT) Azure and top-ranked Amazon.com Inc. ‘S (AMZN) Amazon Web Services. This is a relatively small share, compared to the approximately 90%-control of the search engine market that Google holds, a major reason its search business is the target of antitrust lawsuits.
Ø The consensus EPS estimate is $19.15 (+89.0% Y/Y) and the consensus Revenue Estimate is $56.05B (+46.4% Y/Y) while ex-TAC
Ø Google revenue is seen at $46.08B.
Ø Google Services, Cloud, and Other Bets revenue is seen at $51.95B, $4.34B, and $185.4M respectively.
Ø Operating income estimated at $13.4B while operating margin at 26%.
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