Alphabet (NASDAQ: GOOGL) experienced an extended session surge in the night between October 29 and October 30 as it unveiled a particularly strong third-quarter (Q3) earnings report.
Google powerhouse published that it had generated $88.27 billion in revenue – $2 billion above the $86.27 billion predicted – and earnings per share (EPS) came in at $2.12, significantly better than the forecasted $1.85.
The standout figure, however, was cloud revenue, which grew 35% from the same quarter in 2023 and reached $11.35%.
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In its immediate aftermath, the report generated sufficient momentum to propel GOOGL shares 6.57% in the extended session, from their latest closing price of $169.68 to their press time price of $180.83.
Wall Street analysts react to Google’s strong Q3 report
Citi’s (NYSE: C) Ronald Josey proved the first major institution to react to the impressive report. On October 30, it updated its Google stock price target from $212 to $216 while maintaining the ‘buy’ rating.
Citi emphasized the 12% growth in Google Search and YouTube revenue and the adoption of monetization tools while simultaneously noting Alphabet’s expanding AI offering.
The 35% cloud business growth was also highlighted as a sign of Google’s continued ability to grow and expand its margins – a trend the financial giant believes will continue long-term.
Finally, Josey noted that despite the aforementioned expansion, Alphabet’s involvement in AI is still in the early stages and thus boasts significant growth potential, though he simultaneously warned that there remains some regulatory uncertainty pertaining to the novel technology.
Wedbush’s Dan Ives was not far behind. On October 30, he described Google as the ‘search king’ and set his GOOGL stock price target at $210 with an ‘outperform’ – ‘buy’ rating.
Google’s strong Q3 report unlikely to change expert consensus on GOOGL stock
While it will be interesting and insightful to see how other prominent Wall Street experts and strategists react to the Q3 report, the overall assessment of Alphabet is unlikely to change.
Indeed, since the start of October, the vast majority of ratings have been the various varieties of ‘buy’ with the only notable exceptions – themselves ‘neutral’ ratings – coming from Cantor Fitzgerald and Wells Fargo (NYSE: WFC).
However, the strong Q3 figures are likely to shake up the price targets significantly more, particularly as even some of the recent positive assessments of Alphabet were accompanied by forecast downgrades.
Featured image:
Zankovych, Valeriya. Exterior view of a Googleplex building… Digital Image. Mountain View, CA/USA – May 21, 2018. Shutterstock, December 6, 2018. Date retrieved: October 30, 2024.
