Loup Funds co-founder Gene Munster and managing partner Andrew Murphy turned talking heads on Alphabet Inc’s (NASDAQ:GOOGL) (NASDAQ:GOOG) fourth-quarter earnings.
What Happened: Murphy said he loved the “strong results” and that the markets reacted positively.
Munster labeled Google and rival Apple Inc (NASDAQ:AAPL) as the “two bellwethers,” saying that the upside in search stood out to him. “It was 6% ahead of where the street was at. Overall revenues for Google was 4% better.”
According to Munster, search is Google’s most important segment.
The analyst said Google’s results were a “positive read on Facebook (CRYPTO: FB)” — which is due to release its numbers on Wednesday — as the two companies"tend to move in the same direction."
Munster noted that Facebook has Apple’s IDFA or Identifier for Advertisers to navigate, but the Google results were still a “good indication.”
Comparing Google’s growth to the numbers from two years ago, Munster said that it “is the oxygen of the internet and I think investors can sleep well knowing that they’re powering at a level higher.”
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Why It Matters: On Tuesday, Google parent Alphabet reported Q4 earnings per share of $30.69 beating the Street estimate of $27.48.
Revenues in the period came in at $75.3 billion, a rise of 32% on a year-over-year basis. The revenue numbers beat a consensus estimate of $72.1 billion, according to Benzinga Pro.
The analyst noted a “declaration” in overall revenue from 40% last quarter to 32% in the fourth quarter but he said it was “better than expected.”
The search engine giant’s parent also announced a 20-for-1 stock split, which will come into effect on July 1.
“I think it’s a sign that advertisers are fully engaged in the economy and that was my biggest takeaway [from the results].”
Munster said Google was his third favorite in the FAANG list, with Apple and Facebook taking the top two spots. But he termed Apple and Google as the “gold standard.”
Price Action: On Tuesday, Alphabet Class A shares spiked 9.2% to $3,005 in the after-hours trading. The shares closed 1.7% higher at $2,752.88 in the regular session. On the same day, Alphabet Class C shares soared 9.2% in the after-hours trading to $3,010.55. The shares ended the regular session 1.6% higher at $2,757.57.
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