HEADLINE Alphabet Breaks Records: Highest-Ever Quarterly Revenue and Profits, Stock Surges
KEY POINTS Google parent company Alphabet reported unprecedented quarterly revenue and profits, reaching historic highs in its 26-year history. The surge coincided with a record increase in the search engine giant’s stock price.
In the fourth quarter, Alphabet achieved $86.3 billion in sales, surpassing the previous record of $76.7 billion in Q3. This figure exceeded consensus analyst forecasts of $85.3 billion for Q4, as reported by FactSet.
Alphabet’s earnings per share reached a groundbreaking $1.64, surpassing Wall Street estimates of $1.59 and marking the best-ever performance in the company’s top line.
Despite this remarkable financial achievement, Alphabet’s shares experienced an unexpected 4% dip in after-hours trading. However, they still remained near the stock’s all-time high, surpassing $150, a milestone achieved just last week.
The year 2024 proved to be a monumental period for Alphabet, achieving the highest-ever sales of $307 billion and net income of $74 billion. These figures represented 9% and 23% respective growth from 2023.
SIDE NOTE Alphabet’s core search advertising unit demonstrated resilience, generating a record $48 billion in revenue. This performance alleviates concerns over the past 15 months about Microsoft’s potential to attract Google users through the integration of its Bing search engine with the generative AI chatbot ChatGPT. Microsoft reported a modest 8% year-over-year growth in its search engine and news advertising division in its earnings report, significantly weaker than Google Search’s impressive 13% annual expansion. (Note: Google does not break down revenues from its news business.)
SIGNIFICANT QUOTE Bank of America analysts, led by Justin Post, emphasize the importance of artificial intelligence (AI) for Alphabet in 2024. They consider it a “crucial year” following the “AI wake-up call” in 2023. The analysts express optimism about Google’s advancements in AI, particularly its integration into search and its response to OpenAI’s large-language model, Gemini.