From ZeroHedge, October 29:
With the Fed decision in the history books, attention turned to the barrage of Mag 7 earnings after the close today, which as previewed could move dramatically based on what they reported. And at exactly 4:05pm we got the releases which were 1 out of 3, with META and MSFT sliding, and GOOGL jumping.
Here are the details, starting with today's winner Alphabet, which reported quarterly sales that beat analysts’ estimates, buoyed by the performance of its cloud unit, which is growing as artificial intelligence startups seek Google’s support and computing
- Revenue ex-TAC $87.47 billion, +17% y/y, beating estimate $85.11 billion (Revenue $102.35 billion, +16% y/y, also beat estimate $99.85 billion)
- Google Services revenue $87.05 billion, +14% y/y,beating estimate $84.67 billion
- Google advertising revenue $74.18 billion, +13% y/y, beating estimate $72.46 billion
- Google Search & Other Revenue $56.57 billion, +15% y/y, beating estimate $54.99 billion
- YouTube ads revenue $10.26 billion, +15% y/y, beating estimate $10.03 billion
- Google Network Revenue $7.35 billion, -2.6% y/y, missing estimate $7.39 billion
- Google Subscriptions, Platforms and Devices Revenue $12.87 billion, +21% y/y, beating estimate $12.35 billion
- Google Cloud revenue $15.16 billion, +34% y/y, beating estimate $14.75 billion
- Other Bets revenue $344 million, -11% y/y, estimate $429.4 million
- EPS $2.87 vs. $2.12 y/y, beating estimate $2.26
Alphabet’s cloud division stood out, delivering revenue of $15.16 billion versus the $14.75 billion estimate, underscoring ongoing enterprise demand for AI workloads on Vertex. The company also reported a hefty $155 billion backlog in Google Cloud, signaling sustained momentum into next year.
Turning to costs and expenses:
- Total TAC $14.88 billion, +8.4% y/y, above the estimate $14.84 billion
- Operating income $31.23 billion, +9.5% y/y, below estimate $32.11 billion
- Google Services operating income $33.53 billion, +8.7% y/y, below estimate $33.59 billion
- Google Cloud operating income $3.59 billion, +85% y/y, above estimates $3.01 billion
- Other Bets operating loss $1.43 billion vs. loss $1.12 billion y/y, below estimate loss $1.21 billion
- Alphabet-level activities operating loss $4.47 billion vs. loss $3.17 billion y/y, above estimate loss $3.53 billion
- Operating margin 31% vs. 32% y/y, missing estimate 32.2%
Perhaps the most important two numbers had to do with CapEx, first historical which was above estimates:
- Capital expenditure $23.95 billion, +83% y/y, beating estimate $22.38 billion
Alphabet also posted an impressive FY capex guide of $91 billion to $93 billion, up from around $85 billion previously, and smashing estimates of $84.04 billion, reflecting continued spending on AI data centers and custom chips. Gemini, Google’s flagship AI model, is increasingly being woven across search, Android, and YouTube, helping to offset rising infrastructure costs.
The company also announced that Google Cloud ended the quarter with $155B in backlog, unveiled that it haddDouble-digit growth across every major business, and that its Gemini app now has over 650 million monthly active users.
As Bloomberg notes, Alphabet’s third-quarter results reinforced the AI investment boom that has powered megacap tech stocks and broader equity benchmarks to record highs. What’s more, Alphabet’s confident guidance and ramped-up capex suggest the AI spending cycle remains in full swing -- potentially adding fresh fuel to the trade that continues to define this bull market.
The results were strong enough to push the strong sharply higher after hours, rising as much as 7.5%, to a new record high.
That was the good news. The other two Mag 7s were not so good.
The next giga tech was Meta which reported Q3 earnings that were good, but not good enough for the market which was disappointed by the huge earnings charge, and its shares tumbled after hours. Here is the breakdown:....
....MUCH MORE
