Google Faces Competitive Pressures in Digital Advertising
- Stephen Ju from UBS sets a new price target of $187 for NASDAQ:GOOG, indicating an 11.7% potential upside from its current price.
- Google's search advertising business is challenged by competitors like TikTok, Amazon, and AI companies, impacting its market dominance.
- The stock's volatility and current market capitalization of approximately $2.06 trillion reflect investor interest and the competitive landscape in the digital advertising space.
On October 7, 2024, Stephen Ju from UBS set a price target of $187 for NASDAQ:GOOG. At that time, the stock was priced at $167.42, indicating an 11.7% potential upside. This target was a reduction from a previous $204 target, as reported by TheFly. Google's search advertising business faces challenges from competitors like TikTok, Amazon, and AI companies.
Rich Greenfield from LightShed Partners discussed these threats on 'Squawk Box', emphasizing the growing competition in digital advertising. As these companies innovate and capture market share, Google's dominance in the ad sector is under scrutiny. This competitive pressure may have influenced the revised price target for GOOG.
Currently, GOOG's stock price is $167.78, reflecting a 0.46% decrease or $0.78 drop. The stock has fluctuated between $167.39 and $169.90 today. Over the past year, it reached a high of $193.31 and a low of $121.46. This volatility highlights the market's reaction to the competitive landscape and Google's strategic responses.
Google's market capitalization is approximately $2.06 trillion, with a trading volume of 3.26 million shares. This substantial market cap underscores the company's significant presence in the tech industry, despite the challenges it faces. The trading volume indicates active investor interest, possibly driven by the evolving competitive dynamics in the digital advertising space.
| Symbol | Price | %chg |
|---|---|---|
| 035420.KS | 206500 | 2.18 |
| 035720.KS | 37000 | 0.41 |
| 0700.HK | 380 | 0.11 |
| GOOG.NE | 32.24 | 1.67 |
Alphabet Shares Gain 9% Following Q1 Earnings Beat & First-Ever Dividend
Alphabet (NASDAQ:GOOG) shares soared over 9% intra-day today, reaching a record high, following the company's announcement of its fiscal Q1/24 results, which exceeded Wall Street expectations.
The company reported earnings per share (EPS) of $1.89, surpassing the consensus estimates of $1.51. Revenue also topped expectations, coming in at $80.54 billion against the anticipated $78.71 billion.
The quarter saw a significant year-over-year increase in operating income, rising 46% to $25.5 billion, with net income reaching $58 billion, or $1.89 per diluted share.
In a strategic move, the company declared its first-ever dividend at 20 cents per share and announced a new $70 billion share repurchase program, signaling a robust return of capital even as it continues to heavily invest in expanding its data center capabilities, particularly in generative AI.
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The quarter was highlighted with overall "uncertainty" given the challenging macro environment. Search continues to be resilient given large number of advertisers and the performance nature of ads. The company is slowing hiring, but the impact will mostly be felt in 2023.
Analysts at Oppenheimer reduced their price target to $155 from $165, now assuming slower revenue over the next four quarters, even though Search advertising remains resilient.
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According to the analysts at Deutsche Bank, the most concerning part of the quarterly report was the dramatic year-over-year slowdown in YouTube advertising revenue growth. However, the analysts mentioned they believe many challenges are temporary, such as tough year-over-year comps, dilutive Shorts engagement, and slowing brand advertising spend, mostly in Europe.
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Alphabet Inc. (NASDAQ:GOOG) shares were trading more than 8% higher today afternoon following the company’s reported Q4 results, with EPS of $30.69 coming in better than the consensus estimate of $27.48. Revenue grew 32% year-over-year to $75.33 billion, beating the Street estimate of $72.13 billion. Net ad revenue rose 33% year-over-year, 5% better than the expectations.
Analysts at Oppenheimer increased their price target on the company’s shares to $3,560 from $3,500 following the results, noting that weaker YouTube outlook and reduction in estimates for AppStore was offset by higher Search and GCP estimates.
The company also announced a 20-1 stock split, effective July 1, which is expected to increase the retail demand.
