Adrian JohnsonGoogle parent company Alphabet is set to report earnings, with analysts focusing on several key areas for the company’s future performance:
- Generative artificial intelligence: How the emergence of generative AI will impact Google’s digital advertising and internet search businesses, and whether it can establish Google as an AI leader
- Cloud computing: Trends in Google’s cloud computing business and its competition with Microsoft
- Capital spending: Google’s plans for capital spending in 2024, particularly in relation to its gen AI projects
- Digital advertising: The performance of Google’s core digital advertising business, especially in relation to the wider ad market
Analysts are particularly interested in Google’s outlook for 2024, with expectations for 11.5% revenue growth and 16.5% growth in earnings per share. The company’s stock has already risen by 9% in anticipation of the earnings report.
Google is facing strong competition in the AI space, particularly from Microsoft’s partnership with OpenAI. The company is also aiming to expand its cloud computing business, but missed estimates for this sector in Q3 2023. Investors will be looking for indications that Google’s cloud business is gaining market share and generating revenue growth.
The performance of Google’s core digital advertising business is crucial, as it represents the majority of the company’s revenue. Analysts are split on its outlook, with some expecting improvements in the second half of 2024 and others adopting a more cautious approach.
Overall, 2024 is seen as a crucial year for Google’s future prospects, as the company aims to maintain its position as a digital advertising leader, expand its cloud computing business, and establish itself as a leader in AI.
