US earnings: Alphabet Inc. Q1 results preview and share price outlook

[MongiIG]

Alphabet's integration of generative Artificial Intelligence (AI) into search and ads services, as well capital expenditure will likely be a key focus for investors.

 

 

Shares Alphabet Inc. Artificial intelligence Price Revenue Share price

Written by: Shaun Murison | Senior Market Analyst, Johannesburg

 

Publication date: Friday 19 April 2024 10:02

Key takeaways:

• Earnings Expectations: Alphabet Inc. will release its Q1 2024 earnings on April 25th, with analysts projecting revenues of $69.787 billion and earnings per share (EPS) of $1.89.
• Revenue Diversification and Challenges: Despite a flat performance of its services segment being expected, Alphabet is seeing significant growth in its cloud computing division
• Market Focus on AI: Markets are particularly keen on understanding Alphabet's strategy and progress in integrating generative Artificial Intelligence (AI) into its search and advertising services.
• Stock Price Analysis: Alphabet’s Class C shares have an average 12-month price target of $168.64 among analysts
• Technical Outlook: Alphabet’s stock remains in a long-term uptrend but is undergoing a short term correction thereof

When are the Alphabet results?

Alphabet Inc. is set to report Q1 2024 earnings on the 25th of April 2022.

What ‘the Street’ expects from Alphabet Q1 2024 results?

A Refinitiv poll of analyst estimates (as of the 18th of April 2024) arrives at the following:

• Revenue for the quarter of $69.787bn
• Earnings per share for the quarter of $1.89

Googles services segment remains the largest contributor to revenue ($61.961bn expected) and is expected to be roughly flat year on year.

Googles cloud segment is forecast to be the growth driver for the group adding around 28% y/y revenue growth reaching a figure of $7.546bn.

The groups ‘other bets’ division, is expected to see a 35% contraction in its revenue contribution to group at around $288m.

Markets will be looking for further news around the company’s involvement and integration of generative Artificial Intelligence (AI) into search and ads services. Capital expenditure will likely also be a key focus relative to investment into cloud and AI, and in lieu of recent cost cutting initiatives.

How to trade Alphabet results

Source: IG TipRanks

Based on 11 Wall Street analysts offering 12 month price targets for Alphabet Class C in the last 3 months. The average price target is US$168.64 with a high forecast of US$185.00 and a low forecast of US$160.00. The average price target represents a 7.50% change from the last price of US$156.87.

Source: IG

89% of IG client accounts with open positions on Alphabet as of the 18th of April 2024, expect the price to rise in the near term, while 11% expect the price to fall.

Alphabet (Class C) share price – technical view

Source: IG

The share price of Alphabet Inc. remains in a long-term uptrend. In the near term we are seeing a correction of this uptrend from recent highs and overbought territory.

Trend followers might wait for weakness to play out before looking for long entry in line with the longer-term uptrend. Confirmation that the short-term correction has ended, and that the longer-term uptrend is resuming might be considered on a bullish price reversal closer towards either the 149.90 or 142.30 support levels. In this scenario channel resistance provides a longer-term upside target of around 166.40.

 

 

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