By Dhirendra Tripathi
Investing.com – Alphabet (NASDAQ:GOOGL) stock surged 10% in premarket Wednesday after the Google parent reported a 32% jump in its fourth-quarter revenue, profiting from sustained high demand for its search, Cloud and YouTube services.
Both revenue and earnings easily surpassed estimates.
Total revenuet topped $75 billion, a new record, as corporates and individuals spent heavily on online advertising, shopping and entertainment.
Revenue growth was slower in percentage terms sequentially, reflecting a slight cooling off in online activity as the reopening of economies after nearly two years of the pandemic started to lure people away from their various online devices.
Adding to the gains in the stock was the company’s decision to go for a 20-for-one stock split to appeal to a wider set of investors. A stock split doesn’t change anything fundamentally for the stock but makes it easier for small investors to hold the stock directly. A low share price thus helps in bringing more buyers to the stock. For the same reason, Apple (NASDAQ:AAPL) AAPL and Tesla TSLA split their shares in 2020.
Advertising sales, which include Search and YouTube, rose by a third to exceed $61 billion. YouTube ads contributed $8.6 billion to it. The video platform now records 15 billion views daily, the company said.
Google Cloud, a focus area for the company where it trails Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) by a margin, grew 45% to $5.5 billion.
Operating margin for the company expanded by 1% percentage from a year ago to 29% but was down 3 percentage points from the third quarter.
Net profit jumped 36% to near $21 billion and was boosted by changes to the depreciation method applied to its servers and network equipment.