Google Earnings: Record Profits As Stock Trades At Record High

30 Jan 2024

Forbes

Topline

Google parent Alphabet reported the highest quarterly revenue and profits in its 26-year history Tuesday, coinciding with a record surge in the search engine giant’s stock price.

Alphabet CEO Sundar Pichai has overseen a dramatic recovery in his company's share price despite ... [+] some hesitation on Wall Street about its AI endeavors.

Getty Images for DFB Key Facts

Alphabet’s $86.3 billion in fourth-quarter sales was the most explosive period in the company’s history, breaking Q3’s record of $76.7 billion and beating consensus analyst forecasts of $85.3 billion for Q4, according to FactSet.

The search engine behemoth’s top line was similarly ground breaking, as its $1.64 earnings per share was best ever, coming in well above Wall Street estimates of $1.59.

Shares of Alphabet surprisingly dipped about 4% in after hours trading, still sitting near the stock’s all-time high of over $150 first achieved last week.

2024 was a banner year for Alphabet, as its $307 billion in sales and $74 billion in net income were the highest ever, representing 9% and 23% respective growth from 2023.

Tangent

Crucially, performance in Alphabet’s core search advertising unit proved robust, with its $48 billion of revenue in the unit a record mark. That helps quiet concerns over the last 15 months about Microsoft’s ability to poach Google users due to Microsoft’s Bing search engine’s incorporation of generative AI chatbot ChatGPT. Microsoft reported 8% year-over-year growth in its search engine and news advertising division in its own earnings report Tuesday, far weaker than Google Search’s 13% annual expansion (Google does not single out revenues from its news business).

Crucial Quote

It’s “all about AI in ‘24” for Alphabet, according to Bank of America analysts led by Justin Post. It’s a “crucial year” for Alphabet after 2023’s “AI wake-up call,” the analysts wrote in a note to clients, expressing optimism about Google’s offerings in the space, such as its integration into search and its answer to OpenAI’s large-language model, Gemini.