By Nivedita Balu and Danielle Kaye
(Reuters) - The holidays were a gift to Alphabet (NASDAQ:GOOGL) Inc's Google, quarterly results showed. Next up: Facebook (NASDAQ:FB) owner Meta Platforms Inc.
Alphabet's internet advertising, cloud computing and hardware businesses helped the Google owner soundly beat Wall Street targets for the holiday quarter, sending shares up as much as 9% in after-hours trading.
Brian Wieser, global president of business intelligence, at the ad-buying giant GroupM, said Alphabet's results reinforce that the advertising industry as a whole is in a strong position, despite changes by Apple Inc (NASDAQ:AAPL) that prevent advertisers from tracking iPhone and iPad users without their consent. That has been a concern for social media companies including Meta and Snap Inc (NYSE:SNAP).
Unlike the previous quarter, during which marketers low on product and tech industry privacy changes led to lost sales, Google did not note any particular challenges this time around.
"It sets up well going into Meta Platform's earnings," after the market close on Wednesday, said Gene Munster of investment firm Loup Ventures.
Alphabet's results drove a rally across internet advertising companies. Shares of Trade Desk (NASDAQ:TTD) Inc, Magnite Inc, PubMatic Inc and several more companies that both compete and work with Google all rose in after hours trading late Tuesday.
Recent revenue beats by Alphabet, Apple and others in the tech industry come amid concerns that software and equipment makers alike cannot hold on to gains in usage from earlier in the pandemic. In a generally jittery market, as inflation kicks in, shares fell last month.
Still, "When you look at markets, when the big companies are doing well, you know it's hard to say that there's a problem with the economy," said Paul McCarthy, president at investment firm Kisco Capital.
In the fourth quarter, Alphabet's advertising revenue rose 32.5% to $61.2 billion, $4 billion above Wall Street targets, according to Refinitiv data.
Microchip (NASDAQ:MCHP) maker Advanced Micro Devices (NASDAQ:AMD) Inc also posted strong results on Tuesday for the just-ended quarter. AMD projected 2022 revenue above expectations, driving its shares up as much as 11% in after-hours trading.
But with further inflation looming, Sophie Lund-Yates, equity analyst at Hargreaves Lansdown (LON:HRGV), cautioned that shares of tech companies are "unlikely to have seen the worst of the pain."