GOOG materially beats
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That’s the headline. A deeper dive tomorrow
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Revenue increased 16% YoY to $88.3B, a record reflecting strength business segment wide. Net income increased 35% YoY! Expectations were for earnings of 22.95B. They delivered 26.301. GOOG are clearly on a $100B Net Income TTM (total 12 months) which is very similar to Msft and Apple. Earnings and growth rates-two fundamental metrics which drive valuation. Yet GOOG is 'only' worth $2T vs the $3T+ assigned to the other two mega caps. It is no secret that GOOG is trading at a discount due to its perceived issues with anti trust DOJ investigationsetc. We don't think this is a major issue due to the sum of the parts thesis which would strongly suggest any remedies, such as cessation of payments for default search apps(Apple) would most likely save the company more money than they lose and any potential break up would yield even more shareholder returns. This is why the investment committee reweighted GOOG, higher, a month or so ago. It is a fantastic business 'on sale'.
The company has a very deep portfolio of excellence is a wide range of technology from autonomous vehicles (Waymo) to leading robotics and Quantum compute and cloud services.
Google Cloud revenue increased 35% due to monetisation of generative AI solutions and core Google Cloud products. CEO Pichai said ' Momentum across the company is extraordinary and our innovation and long term focus on AI investment are paying off.
Youtube, once a nascent medium to watch video's for fun is now generating $50B on a TTM basis
Waymo, the most advanced self drive service in the world has hit a milestone of 150k paid trips per week and is driving 'fully autonomously', > 1M miles per week. A 50% increase since August 2024!The company will continue to aggressively invest in Nvidia GPU's and their own custom TPU solutions
It's a very busy week and an action packed day, with the delivery of the Reeves Budget and earnings for Meta, KLA, MSFT.
Have a good day
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How time flies. Without checking I’d have guessed 10-12 years! YouTube has been valued by various financiers at circa 450 billion. Not a bad investment
