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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Alphabet earnings preview: advertising, cloud and AI

Alphabet Inc. is set to announce its third-quarter earnings on October 24th after US markets close. What can we expect from the three pillars of the search engine king? Will the tech giant continue its rally until the year-end?

Google Source: Bloomberg

Alphabet Inc. is set to announce its third-quarter earnings on October 24th after US markets close. What can we expect from the three pillars of the search engine king? Will the tech giant continue its rally until the year-end?

Alphabet earnings date

Alphabet Inc. is scheduled to reveal its third quarter 2023 financial results on Tuesday, October 24, US Eastern Time after market closes.

Alphabet earnings expectation

Q3 Estimate Q2 YOY
Revenue $75.77 billion $74.6 billion 10.2%
EPS $1.45 per share $1.44 per share 36.8%

Alphabet earnings key watch

Advertising revenue

In the previous quarter, Google's advertising revenue increased by 3% from the same period last year, making up 77% of its total revenue.

Source: Alphabet

Despite a prevailing slowdown in ads spending, Google advertising is expected to enjoy modest growth during the third quarter. It is estimated that advertising income will grow by 8.2% year-over-year, generating approximately $58.94 billion in the September quarter.

Cloud

Following a remarkable 31% year-on-year growth in Q2 2023, Google Cloud continues to build up its robust momentum in the fiercely competitive cloud market. This momentum is primarily driven by its expanding range of cloud services and the growing number of data centers in its network. According to Zacks' estimates, Google Cloud's revenue is projected to grow by 24.3% from the prior-year quarter, reaching $8.54 billion in Q3.

Source: Canalys
Source: Canalys

AI

Alphabet's strong commitment to integrating AI techniques into its search business is expected to boost its revenues in the search sector. Furthermore, with claims of collaborating with 70% of generative AI startups, Google Cloud's strategy of harnessing its partner ecosystem in the AI gold rush not only promises to enhance Google Cloud's profitability but also positions the search engine giant advantageously to capitalize on the opportunities emerging from the impending AI boom.

Nevertheless, a significant question remains: can Google's integration of chatbot AI technology compete with the thriving specialized AI tools and platforms, and what will be the impact of this integrated search engine on its other revenue streams?

Alphabet techinical analysis

In the face of fierece competition in the realms of artificial intelligence and rising interest rates, Alphabet's stock price has surged by nearly 60% this year, outperforming the Nasdaq composite, which has recorded a 29% increase year-to-date.

Based on the weekly chart, the price has steadily moved along an ascending trajectory since early this year. The peak from April 2022 at $142 appears to be a significant resistance level for now. A decisive break above this level would clear the path for the price to challenge its all-time high abvove $149. On the flip side, according to the daily chart, the price might seek immediate support from the 20-day MA, which is situated near $135 in case of a retreat.

Source: IG.com
Source: IG.com
Source: IG.com
Source: IG.com

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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