Alphabet's shares were down in premarket trading on Tuesday after the company beat Wall Street's expectations on earnings and revenue, with AI spending projected to increase hugely this year. The Google parent shed 2.6% in premarket as of 6:09 a.m. ET, after closing nearly 2% lower on Wednesday. After the bell, Alphabet reported $113.83 billion in revenue in the fourth quarter, above the estimated $111.43 billion from analysts polled by LSEG. Its Google Cloud division earned $17.66 billion in revenue versus ...

Group 1 - Alphabet Inc reported record revenue of $100 billion for Q3, exceeding analysts' expectations, with quarterly profits of $2.87 per share driven by strong Google Cloud and YouTube advertising revenue, alongside a $155 billion customer backlog [1] - The stock price of Alphabet Inc surged to a record high of $291.59, marking a 4.2% increase to $286.05, and is on track for its sixth gain in the last seven sessions, reflecting a 74% increase over the past six months [2] - Options trading activity indicates a more bearish sentiment among traders, with a 50-day put/call volume ratio of 0.47, suggesting that unwinding some pessimism could potentially boost the stock [3] Group 2 - Today, trading volume has been significantly high with 237,000 calls and 118,000 puts, which is four times the typical amount, indicating strong interest in options, particularly the weekly 10/31 290-strike call [4]

Core Insights - Alphabet, Inc. reported Q2 results that exceeded Wall Street expectations for the tenth consecutive quarter, with revenue of $96.43 billion and earnings per share of $2.31, surpassing estimates of $93.72 billion and $2.16 respectively [1][6] Revenue Performance - Total revenue increased by 14% year-over-year, driven by strong performance across various segments [6] - Google Advertising revenue reached $71.34 billion, up from $64.62 billion year-over-year [6] - Google Search revenue was $54.19 billion, an increase from $48.51 billion year-over-year [6] - YouTube Advertising generated $9.8 billion, up from $8.66 billion year-over-year [6] - Google Cloud revenue grew to $13.62 billion, compared to $10.35 billion year-over-year, reflecting a 32% year-over-year growth [2][6] AI and Market Trends - AI Overviews are driving 10% more queries, with management reporting growth in both queries and commercial queries, contrary to expectations that AI would slow down query growth [3] - Monthly average users for AI Overviews reached 2 billion, with Gemini at 450 million and AI Mode at 100 million, while paid clicks grew by 4% in Q2 [4] - Advertisers utilizing AI tools experienced a 14% increase in conversions, indicating strong adoption rates across Alphabet's products [4] Analyst Reactions and Price Target Adjustments - Analysts from various firms raised their price targets for Alphabet shares, reflecting confidence in the company's performance and growth potential [6] - KeyBanc Capital Markets raised the price target from $215 to $230, while JPMorgan increased it from $200 to $232 [6] - Other notable adjustments include BMO Capital's increase from $208 to $225 and RBC's from $200 to $220 [6] Concerns and Market Position - Despite strong performance, concerns were raised regarding Google's dominance in traditional search and its lag in chatbot technology, which could pose risks if the market shifts towards AI chatbots [5]