Alphabet Q4: Rising CAPEX Spending Driven By AI And Cloud
Summary
- I reiterate a Buy rating for Alphabet/Google, with a fair value of $232 per share, driven by leadership in AI, cloud, and data analytics.
- Alphabet's Q4 FY24 results showed 12% constant revenue growth and 31% EPS growth, with Google Cloud growing 30.1% year-over-year.
- Rising CAPEX spending, especially in AI and cloud infrastructure, is strategic despite potential margin pressures from higher depreciation and R&D costs.
- Alphabet's advertising business, particularly YouTube, continues strong growth, but heavy investments in AI and custom chips are crucial for future GOOGL competitiveness.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.