Google Stock Rises As Q4 Earnings Beat, Alphabet Announces 20-For-1 Stock Split

Google-parent Alphabet reported December-quarter earnings and revenue that topped analyst estimates and announced a 20-for-1 stock split, sending Google stock surging in after-hours action.

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Alphabet (GOOGL) reported fourth-quarter earnings after the market close on Tuesday. The 20-for-1 stock split takes effect after the close of business July 15. According to a Barron’s report, the stock split could pave the way for the tech giant to enter the Dow Jones Industrial Average.

In the fourth quarter, internet search advertising revenue came in above expectations. But Google’s cloud-computing unit and YouTube ad revenue slightly missed estimates.

GOOGL stock popped 9% to 3,003 in extended trading on the stock market today.

Google earnings under generally accepted accounting principles, also known as GAAP, jumped 38% to $30.69 per share, including a $2.84 per-share gain in equity investments. Depending on how the Nasdaq fares in 2022, Google’s gains on equity investments might reverse, said a recent UBS report.

Gross revenue rose 32% to $75.33 billion in the quarter ended Dec. 31.

Analysts had estimated Google earnings of $27.68 per share on gross revenue of $72.3 billion.

Google Stock: Cloud, YouTube Revenue Light

The company said net revenue — minus traffic acquisition costs — came in at $61.90 billion vs. estimates of $59.25 billion. Traffic acquisition costs jumped 28% to $13.43 billion.

Internet search and other revenue rose 36% to $43.30 billion vs. estimates of $40.95 billion. Google said cloud-computing revenue rose more than 44% to $5.54 billion vs. estimates of $5.57 billion. Google cloud cut its operating loss to $890 million, missing estimates of a $758 million loss.

Microsoft’s (MSFT) Azure cloud business turned in a stellar fourth quarter by comparison.

YouTube advertising revenue rose 25% to $8.63 billion. Analysts had estimated YouTube ad revenue of $8.81 billion.

Heading into the Google earnings report, Alphabet traded about 10% below an entry point of 3,019.43.

Google stock had shed 5% in 2022 amid volatility in the Nasdaq. GOOGL stock holds a Relative Strength Rating of 86 out of a best-possible 99, according to IBD Stock Checkup.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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