- Alphabet (GOOG -4.1%, GOOGL -5%) is seeing its biggest intraday drop in nearly two years after last night's miss in Q4 profits, and with analysts trimming estimates and ratings accordingly.
- Many analysts are holding on to Buy ratings, but Stifel Nicolaus has cut its rating to Hold on valuation. Amazon.com (NASDAQ:AMZN) presents multiple headwinds, with a growing position in product searches hitting Google's retail search revenue, and a longer-term threat from Amazon Web Services. (h/t Bloomberg)
- Traffic acquisition costs threaten to go higher, says analyst Scott Devitt. (In yesterday's report, the company noted TAC was up 33% to $6.45B, above analyst expectations for $6.27B.) He has a price target of $1,150, implying just 2.4% upside for GOOGL.
- Cowen raised its price target to $1,300 from $1,230 and held its Outperform rating, "founded on Google successfully extending its dominant desktop advertising position to mobile."
- "Digital advertising is in the midst of a structural shift with traffic migrating from desktop to mobile devices; we expect ad dollars to soon follow," and Google is the best-positioned mobile ad company, says analyst John Blackledge.
- Morgan Stanley (NYSE:MS) trimmed its price target to $1,200, and while there's improvement needed for example at YouTube (revenue growth slowing to 25% from last quarter's 30%), the company should see less incremental TAC pressure this year.
- Now read: Cramer Dives Into Big Tech Earnings - Cramer's Mad Money (2/1/18)
Original article