Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) the shares are worth a trillion dollars again, and that’s not good news.
Before the gains came out yesterday (after closing the deal), the Internet search giant was trading at about $ 1,500 per share and carried a market capitalization of $ 1.05 trillion. Investors are currently selling the shares – another 4.5% as of 1:30 p.m. EDT – and Google’s parent shares are back at the $ 1 trillion level.
And yet Alphabet didn’t miss out on the gains either yesterday. He beat.
According to revenue, analysts had predicted that Alphabet would only earn $ 8.21 per share for sales of $ 37.4 million. Alphabet hit those numbers with a stick, earning $ 10.13 with sales of $ 38.3 million.
So why is the current stock going down? Well, for one thing, the revenue that “beat” what Alphabet reported last night was a bit of a pirouette. Yes, on the one hand, it was better than expected. But it still meant a 2% drop in revenue in the 2nd quarter of the previous year, the first time it has Alphabet always recorded a decline in his company’s revenue.
Also, the number of gains. The alphabet achieved results, but did so by reporting 29% less GAAP profits in the second quarter of 2020 than it did in the 2nd 2019.
Don’t count alphabet until now, though. In the midst of all the bad news, there was also good news to report. Google search revenue may have decreased, but YouTube advertising revenue increased by 6%. Alphabet’s cloud computing business as well, though at no point as big as some of its rivals, has grown 43% in the quarter.
Meanwhile, despite declining GAAP profits, rising operating cash and capital spending, Google generated a stellar positive cash flow of $ 8.6 billion in the quarter, 23% ahead of reported net income and 32% more year-on-year.
Trading that has about 32 times the free cash flow right now, Alpha shares may not be cheap, but it is still an immensely profitable cash company and its cash is growing strongly.