Alphabet (GOOGL) reported blowout Q2 results, topping both earnings and revenue estimates driven by heightened online activity and growth in digital advertisements. Shares of Google’s parent company were trading around 3.5% higher in pre-market trading at the time of writing.
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Adjusted earnings almost trebled to $27.26 per share, beating Street estimates of $19.20 per share. The company reported earnings of $10.13 per share in the prior-year period. (See Alphabet stock charts on TipRanks)
Total revenue grew 62% year-over-year to $61.88 billion versus the consensus estimate of $56.02 billion.
Segment-wise, Google Services revenues, which includes advertising, Android, Chrome, hardware, Maps, Google Play, Search, and YouTube jumped to $57 billion compared to $35 billion reported a year ago.
Furthermore, Google Cloud revenues, which includes Google’s infrastructure and data analytics platforms and other services, came in at $4.6 billion versus $3 billion in the prior-year quarter.
Notably, total operating margin was 31%, a huge jump from 17% reported a year ago.
Alphabet and Google CEO Sundar Pichai commented, “In Q2, there was a rising tide of online activity in many parts of the world, and we’re proud that our services helped so many consumers and businesses. Our long-term investments in AI and Google Cloud are helping us drive significant improvements in everyone’s digital experience.”
Following the upbeat Q2 results, Morgan Stanley analyst Brian Nowak increased the price target on GOOGL from $2,575 to $3,000 (13.7% upside potential) and reiterated a Buy rating.
Overall, the stock has a Strong Buy consensus rating based on 15 Buys and 1 Hold. The average Alphabet price target of $2,978.21 implies 12.9% upside potential from current levels. Shares of GOOGL have jumped 75% over the past year.
GOOGL scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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