Alphabet(US:GOOGL) Guoxin Securities·2024-10-31 07:53Investment Rating - The investment rating for Alphabet Inc. (GOOGL.O) is "Outperform" [4] Core Insights - The report highlights significant growth in cloud business revenue and profit margins, alongside steady growth in advertising revenue despite high base effects [1][6] - The company expects continued robust growth in advertising driven by AI enhancements, with a positive outlook for cloud business profitability [3][7] - Revenue forecasts for fiscal years 2024-2026 have been slightly adjusted upwards due to accelerated cloud profit release [3] Summary by Sections Financial Overview - For FY24Q3, the company reported total revenue of $88.268 billion, representing a year-over-year increase of 15% [1] - Google Services revenue reached $76.5 billion, with Google Ads contributing $65.854 billion, reflecting a 10.4% year-over-year growth [1][9] - Google Cloud revenue was $11.353 billion, showing a year-over-year growth of 35% [1][11] Business Highlights - Advertising revenue grew steadily at 10% year-over-year, supported by strong demand in financial insurance and retail sectors, as well as election-related advertising [2][6] - The cloud business has seen seven consecutive quarters of accelerating growth, with a notable increase in operating profit margin to 17% [2][7] - Capital expenditures are expected to remain stable in Q4, with a projected total of approximately $51 billion for the year [2][8] Performance Outlook - The company maintains an optimistic outlook for advertising growth, bolstered by AI capabilities enhancing user engagement and search frequency [3][6] - Revenue projections for 2024-2026 have been adjusted to $352 billion, $405 billion, and $455 billion respectively, reflecting a 1%-2% increase [3][5] - Net profit forecasts for 2024-2026 have also been revised upwards to $96.8 billion, $111.8 billion, and $128.3 billion respectively [3][5]