Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Google Stock Will Continue To Outperform Even After 50% Jump

By Investing.com (Haris Anwar/Investing.com)Stock MarketsJul 30, 2021 09:21AM ET
www.investing.com/analysis/google-stock-will-continue-to-outperform-even-after-50-jump-200594743
Google Stock Will Continue To Outperform Even After 50% Jump
By Investing.com (Haris Anwar/Investing.com)   |  Jul 30, 2021 09:21AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Google parent company Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) this week smashed Wall Street’s earnings estimates by producing sales and profit that far exceeded expectations.

The search engine behemoth reported its highest quarter ever for sales and profit, fuelled by the robust ad spending from businesses trying to capture sales as economies reopen across the globe.

Alphabet reported second-quarter revenue of $61.88 billion, an increase of 62% from a year earlier, when its ad business slumped after the outbreak of the coronavirus that pushed the economy into a deep recession. Profit more than doubled to $18.53 billion, with per-share earnings surpassing analysts’ expectations.

Anticipating this boost from the reopening, the California-based company’s shares have soared about 56% this year, at a time when gains in other high-growth tech stocks are slowing. Google stock closed yesterday at $2,715.60. It remains the best-performing name among the five mega tech stocks that include Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN).

GOOGL Daily
GOOGL Daily

“We saw a rising tide of online consumer and business activity,” said Chief Executive Sundar Pichai in a Wall Street Journal report, adding that digital publishers and YouTube partners earned more during the period than any time in the company’s history.

The company posted $50.44 billion in sales from advertising, a 69% increase spurred by a red-hot US market where ad spending is on track to be the fastest in the post-war era. YouTube’s ad business collected $7 billion in revenue, increasing 84% from a year earlier.

Bull Thesis Remains Intact

This growth momentum, according to many analysts, will continue as consumers resume trips to restaurants, shops and even vacation destinations—activities that fuel internet traffic and generate ad revenue for Google. Due to these positive catalysts, many leading analysts have raised their price target on Google stock this week.

JPMorgan, while raising its price target on GOOG stock to $3,250 from $2,638, said in a note that Alphabet remains one of its top picks as key components of the bull thesis continued to play out, including ad recovery, margin upside, cloud profit improvement and greater capital returns.

The note added:

“We continue to believe there is further upside as Search & YouTube are well-positioned to support an increasingly digital economy. We expect overall [operating income] margins to compress a bit in 2H21 as GOOGL brings back more variable costs, but [management’s] tone here was less cautionary than expected and even as the company will invest for future growth, we believe it has likely gained some cost efficiencies coming out of COVID-19.”

Barclays analysts in their note reiterated their call, listing Alphabet among their favorite names in the mega-cap tech space, noting the outlook for its shares remains bright. The firm held its overweight rating, though raised its price target to $3,200 from $3,000.

Their note said:

“Digital advertising is proving to be very resilient in this economic cycle, and the growth rates across the space, including at Google and YouTube, are staggering owing to share shift and easy comps—some of the highest figures we may ever see. Google’s auction-based system is picking up in categories that are strong, while overall activity is elevated for both consumers and marketers.”

Bottom Line

With its traditional growth driver, search-engine ads, remaining unchallenged, and the company positioning itself to grow faster in the post-pandemic world, Google’s shares will continue to outperform other mega tech peers. The stock could see more upside as the economy reopens, bringing back digital ad sales from hospitality and travel businesses.

Google Stock Will Continue To Outperform Even After 50% Jump
 

Related Articles

Google Stock Will Continue To Outperform Even After 50% Jump

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (5)
David Smith
David Smith Aug 02, 2021 1:14AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Impressive performance from GOOGL. Looks like advertisers are coming back in a big way as most ad based revenue companies are getting a substantial bump up.
Britta Nilsson
Britta Nilsson Jul 30, 2021 4:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Like.
Ljiljana Drešaj
Ljiljana Drešaj Jul 30, 2021 2:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
treba staviti zastavu i tako imati prevod.
Ljiljana Drešaj
Ljiljana Drešaj Jul 30, 2021 2:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
neznam engleski.
chinagolueloke eloke
chinagolueloke eloke Jul 30, 2021 2:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thanks so much
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email