Today we will comment on the results of Alphabet, owner of Google, for the first quarter of 2022, as well as the negative reaction from investors.
Below is a comment by Rafael Bevilacqua, chief strategist and founding partner of the analysis house Levante Ideias de Investimento, on the subject. Every day, Bevilacqua brings news and reviews of publicly traded companies for you to make the best investment decisions. This content is accessible to subscribers to UOL. O UOL has an exclusive area for those who want to invest their money safely and profit more than with savings. Meet!
Falling profit raises concerns about big tech
Alphabet (NASDAQ: GOOGL), the North American tech giant and owner of Google, released its results for the first quarter of 2022 on Tuesday (26), after the markets closed, and disappointed investors.
The company’s revenue for the quarter totaled $68.01 billion, an increase of 23% compared to the same period a year earlier. However, the data came slightly below market expectations, which projected revenue of US$ 68.11 billion.
The negative highlight of the period was revenue from YouTube, which reached US$6.87 billion, up 14.4% year-on-year, but significantly below market projections of US$7.5 billion.
On the other hand, Google Cloud, the company’s cloud service, was a positive surprise, generating revenue 43.8% higher than the one reported a year earlier, totaling US$ 5.82 billion.
The company’s net income also disappointed, falling 8.3% compared to the first quarter of 2021 and reaching $16.43 billion. As a result, earnings per share dropped to $24.62 from $26.29 a year earlier.
Alphabet’s weaker-than-expected result sparks a warning about large US technology companies, and reinforces the prospect that they should show a slowdown in performance given the current conjuncture.
With the prospect of rising interest rates in the US and the passage of the Digital Services Act in Europe, the scenario becomes uncertain for the “big techs”, as the US tech giants are called.
It is clear that companies will remain profitable and their services will continue to be used by billions of people around the globe, but the financial results of most of these companies are expected to slow down.
Therefore, we expect a negative impact on Alphabet’s stock in the short term.
On Wednesday (27), Alphabet shares closed down 3.67%, quoted at US$ 2,285.89.