Scott Devitt of Stifel joins "Squawk Alley" to discuss the tech sector and Google's positive earnings.
Shares of Alphabet climbed 9% Wednesday after the company reported earnings that beat revenue expectations, easing investors’ fears about the pandemic’s impact on advertising. The stock move is added over $70 billion to its market cap, bringing it over $927 billion.
The Google parent company reported earnings of $9.87 per share and revenue $41.16 billion on Tuesday, missing analysts expectations on earnings but surpassing revenue estimates, based on data compiled by Refinitiv. The stock initially picked up after the report showed revenue growth of 13% from the previous year, a deceleration from the 17% growth during the same quarter last year but with significant headwinds.
Analysts were heartened by executives’ comments suggesting the sharpest hit to revenues may be behind them. On the company’s analyst call, CFO Ruth Porat said there was an “abrupt” drop-off in ad revenues in March but Alphabet has yet to see “further deterioration in the percentage of year-on-year revenue declines.”
Porat said the company is also seeing “early signs” of users “returning to more commercial behavior” but warned they don’t yet know how long that behavior will last or whether it will be monetizable.
Direct response ads on YouTube in particular stayed strong throughout the quarter. YouTube advertising brought in $4.04 billion in the quarter, up 33% year on year. While brand advertising slowed down around mid-March, direct response ads, which are used to prompt users to take an action like visiting a website, continued to grow.
With more people spending time inside, executives said Google products are seeing a surge in engagement on platforms like Android, YouTube and Google Classroom. The company also expressed confidence in its buyback program, which Porat said would continue as planned.
For access to live and exclusive video from CNBC subscribe to CNBC PRO:
[ Ссылка ]
» Subscribe to CNBC TV: [ Ссылка ]
» Subscribe to CNBC: [ Ссылка ]
» Subscribe to CNBC Classic: [ Ссылка ]
Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.
Connect with CNBC News Online
Get the latest news: [ Ссылка ]
Follow CNBC on LinkedIn: [ Ссылка ]
Follow CNBC News on Facebook: [ Ссылка ]
Follow CNBC News on Twitter: [ Ссылка ]
Follow CNBC News on Instagram: [ Ссылка ]
#CNBC
#CNBC TV
