Alphabet will continue to see benefits from digital ad trend, Monness Crespi Hardt says

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Alphabet (NASDAQ:GOOGL) is slated to report fourth-quarter results after the close of trading tomorrow, and Monness Crespi Hardt analyst Brian White believes the company will show it is still benefiting from the digital ad trend, the cloud and could talk about the metaverse.

White, who has a buy rating and a $3,660 price target, noted that Alphabet should report at least $71.93 billion in revenue, aided by $66.16 billion in Google Services revenue and Google Cloud revenue at $5.49 billion, up 43% year-over-year. Earnings should come in at $28.07, compared to Wall Street estimates of $27.31 per share.

"We look for Alphabet to offer a glimpse into digital ad spending trends ahead of quarterly reports from Meta (NASDAQ:FB), Snap (NYSE:SNAP), and Twitter (NYSE:TWTR)," White wrote in a note to clients.

"That said, Alphabet was the least impacted in 3Q:21 by Apple’s (NASDAQ:AAPL) App Tracking Transparency that rolled out with iOS 14.5, experiencing only a modest headwind to its YouTube Ads business. Moreover, we expect an update on the company’s shopping-related initiatives, including commerce on YouTube, and trends at Google Cloud."

A consensus of Wall Street analysts expect the company to generate $71.87 billion in revenue and earn $27.19 per share.

Within Google Services, White said that advertising revenue should grow 26% year-over-year to $58.26 billion, aided by Google Search & Other, followed by YouTube. The analyst also added that the Sundar Pichai-led company could provide an update on its shopping initiatives, including commerce on YouTube and trends for Google Cloud.

However, there are some concerns that the stock could be hit as U.S. regulators look to "reign in big tech," citing the Senate Judiciary Committee voting in favor of The American Innovation and Choice Online Act.

Earlier this month, it was reported that Google (GOOGL) was working on its own augmented reality headset, as it looks to compete with Meta Platforms (FB) and Apple (AAPL) in the space.

Comments

[Google is Golden]

I'm a retail investor and, given the recent dip, have been buying all the way! Fair value for the stock is $3k in my view and, eventually, the company is going to pay a dividend or do something with it's excessive capital.

$142 Billion of total cash on hand is just insane and I am anticipating the company doing something with it...

Good luck to all and LONG GOOG / AMZN

[Steven.Sheffey]

@Google is Golden they've had insane piles of cash forever though. What makes you think they'll do a dividend now?

[John Poorer]

Retail investors buy the dip and money managers sell. It does not matter where the price moves today. Buyer is the retail guy and sellers are the so called "smart money".

[Mb866_00]

@John Poorer good thing you doubled back on your point at the end, readers could have missed the first part

[John Poorer]

@Mb866_00 I believe that learning comes from repeats

These comments are more for myself than anyone else. I know I must not buy now. That’s why all the comments.

[Basit Saliu]

Go GOOG/GOOGL!