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Will Alphabet’s Q3 Results Reassure Tech Investors?

Published 18/10/2018, 11:31
Updated 21/10/2020, 09:15

While Google-parent didn’t have a flawless start to 2018, dipping under $1025 a few times in spring, by late May it was building up a nice little head of steam, eventually hitting an all-time high of $1298.75 towards the end of July.

Alphabet Inc

Yet since then the stock has tumbled from that peak, part of a wider decline that has also seen its fellow FAANG stocks struggle. Having struck $1075 in mid-October, Alphabet (NASDAQ:GOOGL) Inc now sits at a current trading price of $1130.05.

The final push to that aforementioned record high was July’s second quarter update. What’s interesting is that the headline could have been the 9% drop in net income to $3.2 billion following the EU’s $5 billion fine for ‘serious illegal behaviour’ when trying to ‘cement its dominant position’ in search.

Instead investors focused on the 26% surge in revenue to a better than forecast $32.66 billion, alongside the news that excluding fines net income would have been nearly $8.3 billion. Advertising revenue rose 24% to $28.1 billion, with a 58% surge in paid clicks on Google properties year-on-year helping counter the 22% decline cost-per-click.

In terms of Thursday’s Q3 statement, analysts are expecting Alphabet to post a 23% rise in revenue to $34.04 billion, alongside a 9% rise in earnings to $10.45 per share.

Alphabet Inc has a consensus rating of ‘Buy’ alongside an average target price of $1322.92.

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