Alphabet (GOOGL) Q1 Earnings to Gain on Google Cloud Strength – April 25, 2022

Alphabet‘s (GOOGL Free Report) first-quarter 2022 results, which are scheduled to be released on Apr 26, are likely to reflect strength in its cloud arm, Google Cloud.

Google Cloud has turned out to be the key catalyst behind the company’s growth on the back of its strengthening cloud service offerings.

The company’s cloud offerings include Google Cloud Platform and Google Workspace, which are continuously gaining momentum in the booming cloud computing market. Google’s growing investments in infrastructure, security, data management, analytics and AI remain major positives.

Alphabet has been persistently witnessing strong growth in revenue generated from the underlined segment, which derives revenue from fees collected for Google Cloud Platform services and Google Workspace collaboration tools.

Revenues from the segment were $ 5.5 billion in fourth-quarter 2021. The figure accounted for 7.4% of total revenues and exhibited year-over-year growth of 44.6%.

For first-quarter 2022, the Zacks Consensus Estimate for Google Cloud revenues is pegged at $ 5.7 billion, suggesting growth of 41% from the prior-year quarter’s reported figure.

Click here to know how the company’s overall first-quarter performance is likely to have been.

Alphabet Inc. Price and Consensus

Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote

Factors to Consider

Google’s strengthening efforts toward the expansion of its cloud services portfolio, data centers, availability zones and regions are likely to have helped it gain share in the highly competitive cloud market.

In the quarter under review, the company made its intelligent data fabric, Dataplex, generally available, which helps customers centrally manage, monitor, and govern data across data lakes, data warehouses and data marts.

Google Cloud also made the new instance series of its Compute Optimized family, called C2D generally available, which are powered by 3rd Gen AMD EPYC processors.

It made its new visual user interface for Speech-to-Text (STT) API in Google Cloud Console, generally available in the first quarter.

Serverless Spark, which simplifies data processing and data science jobs, was made available generally.

All the endeavors are expected to have benefited the first-quarter performance of Google Cloud.

Zacks Rank & Stocks to Consider

Currently, Alphabet has a Zacks Rank # 3 (Hold).

Investors interested in the broader technology sector can consider stocks like Jack Henry & Associates (JKHY Free Report), Broadcom (AVGO Free Report) and Analog Devices (ADI Free Report), each carrying a Zacks Rank # 2 (Buy). You can see the complete list of today’s Zacks # 1 Rank (Strong Buy) stocks here.

Jack Henry & Associates has gained 16.3% in the past year. The long-term earnings growth rate for JKHY is currently projected at 17%.

Broadcom has gained 31.4% in the past year. AVGO’s long-term earnings growth rate is currently projected at 14.5%.

Analog Devices has gained 3.9% in the past year. The long-term earnings growth rate for ADI is currently projected at 12.3%.


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