On Wednesday, Alphabet Inc. (NASDAQ:GOOGL) stock maintained its Hold rating and a $170.00 price target from Loop Capital following the company's second-quarter earnings report.
The tech giant showcased robust performance in its Search and Cloud segments, though it experienced weaker results in YouTube advertising and a significant shortfall in Network ads. The results led to a 4% increase in operating profit over the consensus estimates, primarily driven by stronger search revenue and continued cost management.
The earnings call was notably the final one for Ruth Porat, Alphabet's long-tenured CFO, who is transitioning to a new role as president and CIO, a move that was announced a year prior. Porat has been praised by the investment community for her performance since joining the company in 2015. Anat Ashkenazi from Eli Lilly (NYSE:LLY) will be stepping into the CFO role starting July 31.
Loop Capital highlighted the second quarter as generally in line with expectations, with the most critical metrics for the stock showing positive trends. Despite this, the earnings per share (EPS) only exceeded consensus predictions by 2.6%, a margin that fell short of what many investors had anticipated. Following the report, Alphabet's shares experienced initial after-hours volatility, initially rising about 2% before dipping by a similar margin.
In other recent news, tech giants Tesla (NASDAQ:TSLA) and Alphabet reported disappointing earnings, causing a downturn in Wall Street futures. Tesla's profits missed analysts' second-quarter expectations, marking the company's lowest profit margin in over five years.
Alphabet, despite surpassing revenue and profit forecasts, saw a slowdown in advertising growth, sparking investor concerns. Rosenblatt maintained a neutral stance on Alphabet, citing the company's mixed outcomes in the face of AI advancements and competitive pressures.
Mizuho Securities raised Alphabet's price target to $210, signaling a positive outlook on the company's robust financial quarter and commitment to AI investments. RBC Capital also increased Alphabet's price target, acknowledging the company's potential in AI and improving operational leverage. However, the firm anticipated a negative investor reaction to the third-quarter margin outlook due to expected increases in AI-related depreciation.
UBS adjusted its price target on Alphabet shares, citing anticipated revenue growth driven by AI investments. Despite this, the firm noted that the full extent of gains from AI advancements in Google Cloud Platform may not materialize until the first half of 2025 or later. These are the recent developments in the financial landscape of these tech companies.
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