Latest news with #PhilippSchindler
Yahoo
03-05-2025
- Business
- Yahoo
70 Billion Reasons to Buy Alphabet Stock Right Now
Investors are worried about how Alphabet's ad revenue will hold up in an economic downturn. Two court cases are affecting the long-term outlook for Alphabet. The stock is at the cheapest level it has been over the past decade. Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) recently gave investors some encouraging news during its first-quarter earnings release, including a better-than-feared result that was relatively upbeat for the rest of the year. This flies in the face of many investors' concerns regarding the effects of tariffs, but we'll see how tariffs affect Alphabet as we move along throughout the year. During its Q1 earnings report, the company also made one exciting announcement: A $70 billion share repurchase authorization. This is a massive chunk of money, but some special circumstances are going on right now that will make this share repurchase plan different from the rest. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Alphabet is better known as the parent company of Google, YouTube, and the Android operating system. It primarily makes revenue from advertising, which is why a lot of pessimism is baked into the stock. Ad spending is among the first line items to get cut when a company's facing an economic downturn, which would impact Alphabet substantially. When Alphabet's management was asked during the company's first-quarter conference call whether they saw any effects from tariffs, they specifically called out the end of de minimis exemptions as a headwind. This can be directly tied to Alphabet's business with deep discount Chinese retailers like Temu and Shein, but Chief Business Officer Philipp Schindler made a comment that it was only a "slight" headwind. He also noted that Alphabet has a ton of experience in managing through uncertain times, and that he was confident in its ability to handle whatever situation is thrown at it. After the earnings release, the stock initially rose, but then saw a small decline. This may indicate that the market liked what it heard, but still isn't convinced that Alphabet won't see a huge effect, despite management stating otherwise. As a result, there likely won't be any huge catalysts to move the stock besides news headlines and the general market direction between now and its next earnings report. This is what makes the $70 billion share repurchase program so exciting: The stock is incredibly cheap. This isn't a hard concept to grasp: The cheaper the stock is, the more shares you can buy with a set budget. Alphabet's stock is among the cheapest it has been this decade, which will make this share repurchase program very effective. At 17.9 times trailing earnings and 16.8 times forward earnings, Alphabet is attractively priced, especially considering that the S&P 500 trades for 22.1 times trailing earnings and 20.5 times forward earnings. Investors are worried about its ad revenue holding up, but they're also concerned about the ongoing attempt by the Department of Justice to break up Alphabet due to an illegal monopoly. In two separate court cases, a district judge found that Alphabet maintained an illegal monopoly in the search engine business (Google Chrome) and its ad platform. A few remedies are being floated around right now to resolve the illegal monopoly problem, but we're a long way from any resolution. This case will undoubtedly end up at the Supreme Court, and it could take years to get there. Investors would be forgiven if they don't want to hold throughout that saga, but this is just another factor contributing to Alphabet's cheap stock price, which will make its $70 billion buyback program more effective. By reducing the share count, Alphabet's earnings per share (EPS) will rise even if earnings stay flat, because the denominator of the equation is decreasing. This is key in the current environment, because Alphabet could see some headwinds in earnings growth as we face economic uncertainty. While there are some dark clouds on the horizon for Alphabet, no one is sure how they will affect its stock. However, the market has already assumed that Alphabet is going to be pelted with a heavy storm. With this pessimism already baked into the stock price, I think now represents a strong buying opportunity, if you're willing to hold on through the storm for the next three to five years. Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $610,327!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $667,581!* Now, it's worth noting Stock Advisor's total average return is 882% — a market-crushing outperformance compared to 161% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 28, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy. 70 Billion Reasons to Buy Alphabet Stock Right Now was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
30-04-2025
- Business
- Yahoo
Meta Blows Past Q1 Expectations, Ups Capex Target for Full-Year 2025
Social-media giant Meta isn't forecasting a slowdown in business at this point, handily topping Wall Street expectations for the first quarter and issuing Q2 guidance within analyst forecasts. For the first quarter of 2025, Meta significantly exceeded expectations. The company, parent of Facebook and Instagram, reported revenue of $42.31 billion (up 16%) and net income of $16.64 billion (up 35%), or $6.43 per share. Wall Street anticipated $41.36 billion in revenue and earnings per share of $5.22. More from Variety Snap Delivers Q1 Earnings Beat as Snapchat Tops 900M Monthly Users, Withholds Guidance Given Economic 'Uncertainty' Spotify Adds More Premium Subs in Q1 Than Expected to Reach 268 Million, but CEO Warns of Near-Term 'Noise' Amid Economic Uncertainty YouTube Ad Revenue Bulks Up 10.3% to $8.9 Billion as Alphabet Q1 Net Profit Jumps 46% 'We've had a strong start to an important year, our community continues to grow and our business is performing very well,' Meta chairman and CEO Mark Zuckerberg said in prepared remarks with the company's earnings report. 'We're making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives.' Meta plans to spend heavily on AI this year — and even more than it did three months ago. The company said it expects 2025 capital expenditures to be $64 billion-$72 billion, increased from its prior expectation of $60 billion-$65 billion. The higher capex reflects 'additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware.' Other internet players have signaled they expect a pullback in ad spending. Asked how macroeconomic uncertainty might affect Google's Q2 advertising sales, chief business officer Philipp Schindler told analysts last week that 'it's too early to really comment on that' but that for full-year 2025, he said, new U.S. tariffs 'will obviously cause a slight headwind to our ads business' primarily with respect to spending from Asia Pacific-based retailers. Snapchat parent Snap did not issue formal Q2 financial guidance citing 'uncertainty' about the market and said its ad sales have 'experienced headwinds' so far in the month of April. Best of Variety New Movies Out Now in Theaters: What to See This Week What's Coming to Netflix in May 2025 What's Coming to Disney+ in May 2025 Sign in to access your portfolio
Globe and Mail
28-04-2025
- Business
- Globe and Mail
Meta Q1 Earnings Preview: Is META Stock a Buy or Sell Ahead of the Report?
This week, four constituents of the 'Magnificent 7' will report their earnings for the March quarter. Meta Platforms (META) and Microsoft (MSFT) will release their reports on April 30, and Apple (AAPL) and Amazon (AMZN) will release theirs on May 1. The Q1 earnings season for the group began on a good note. While Tesla (TSLA) missed on both the top line and the bottom line, the stock soared after its Q1 earnings, after CEO Elon Musk announced that he would step back from his Department of Government Efficiency (DOGE) responsibilities to focus on Tesla. Alphabet (GOOG), on the other hand, reported impressive numbers for Q1 and the stock closed marginally higher after the earnings. While cloud and YouTube revenues came in a tad short of estimates, the company beat on the headline revenue and profit numbers, led by strong growth in the core advertisement business. In this article, we'll look at Meta's Q1 earnings estimates and analyze whether the stock is a buy or a sell heading into the report. Meta Q1 Earnings Preview Analysts expect Meta's Q1 revenues to rise 13.4% year-over-year to $41.35 billion. During their Q4 2024 earnings call, Meta forecast Q1 revenues to be between $39.5 billion and $41.8 billion. Analysts are modelling Meta's Q1 earnings per share to rise 10.6% YOY to $5.21. However, for the full year, analysts expect Meta's EPS to be similar to last year. Notably, U.S. tech giants could face higher depreciation expenses for the next few years on account of their massive capex toward artificial intelligence (AI), which would dent their profitability. Meta's Business from Chinese Advertisers Could Be Negatively Impacted Digital ads account for the bulk of the revenues for Alphabet and Meta. Alphabet had a warning for the companies in the digital advertisement business that should ring an alarm for Meta investors. Google's Chief Business Officer Philipp Schindler acknowledged during the Q1 earnings call that the company is 'not immune to the macro environment.' He added, 'We wouldn't want to speculate about potential impacts beyond noting that the changes to the de minimis exemption will obviously cause a slight headwind to our ads business in 2025, primarily from APAC-based retailers.' While Meta is banned in China, Chinese companies use its platforms to reach potential buyers, particularly in the Western world. Chinese advertisers reaching out to U.S. consumers have been a key driver of Meta's growth over the last couple of years – something the company has discussed in its last several earnings calls. While Meta does not provide the breakdown of spending by Chinese advertisers, in 2024, it earned $18.35 billion in revenue from China. To put that in context, it earned $13.69 billion and $7.40 billion in 2023 and 2022 from China, respectively. This revenue is at risk from the 'reciprocal' tariffs that President Donald Trump has imposed on imports from China. Meta Stock Forecast Sell-side analysts have also taken note of the deteriorating macro environment, and multiple brokerages have slashed Meta's target price amid the U.S.-China tariff war. Among major brokerages, Stifel lowered Meta's target price from $740 to $628 while Benchmark cut its from $820 to $640, even though both maintained their 'Buy' rating on the stock. Cantor Fitzgerald also maintained its 'Overweight' rating while lowering Meta's target price from $790 to $624. Despite the flurry of target price cuts, Meta's mean target price of $690.87 is 26.1% higher than last week's closing prices, and it has a consensus rating of 'Strong Buy' from the 53 analysts actively covering the stock. Is Meta Stock a Buy or a Sell Ahead of the Q1 Earnings? Along with the headwinds related to its core business, especially the revenue from Chinese advertisers, Meta is also facing regulatory issues. The U.S. Federal Trade Commission is suing the social media giant for a divestment of WhatsApp and Instagram. Incidentally, Alphabet is also facing regulatory heat, and the U.S. Justice Department plans to break up Alphabet and force the company to divest the Chrome browser and Android operating system. It also wants the company to its end exclusive agreements with phone makers like Samsung and Apple. Adding to Meta's woes is the testimony from former Facebook executive Sarah Wynn-Williams, who alleged that Meta executives "lied about what they were doing with the Chinese Communist Party' to grow their business in that country. Meta stock currently trades at a forward price-earnings (P/E) multiple of 22.72x, which looks quite balanced. While the multiples might not be exorbitant, they aren't mouthwateringly cheap either to build a strong 'buy' case for the stock. Overall, given the uncertainty over tariffs and the feared slowdown in the U.S. economy, I would stay on the sidelines on Meta for the time being and not add more shares ahead of the Q1 confessional.
Yahoo
26-04-2025
- Business
- Yahoo
Alphabet boosts dividend and plans new share buyback, reassuring investors amid antitrust, AI worries
Google parent Alphabet (GOOG) reported strong first-quarter results, with both revenue and earnings coming in ahead of analyst estimates thanks to solid growth in its advertising business. The company also announced a 5 percent increase in its quarterly dividend to $0.21 per share, as well as a new $70 billion share repurchase authorization. Alphabet stock has come under pressure, falling about 13 percent so far this year, as investors grapple with multiple antitrust lawsuits the company faces even as new competitive threats emerge from artificial intelligence. Google has long dominated online search, but new AI rivals such as OpenAI's ChatGPT and Perplexity threaten to upend how people look for information online. The first-quarter results should calm investors' concerns for now, but the outlook for the rest of the year is clouded by how a tariff-induced economic slowdown could impact Alphabet's massive advertising business. Its shares were up about 3 percent in early trading Friday. Here's what else investors should know about the company's first-quarter results. Q1 revenue increased 12 percent from the previous year to $90.2 billion. Operating income rose 20 percent to $30.6 billion. Diluted EPS was $2.81, compared to analyst estimates of $2.01. Some analysts worried that Alphabet's results could show a slowdown in advertising spending as companies navigate the uncertainty created by new tariffs. There were also concerns that new Google features such as AI Overviews would hurt profits at the search giant. 'Search saw continued strong growth, boosted by the engagement we're seeing with features like AI Overviews, which now has 1.5 billion users per month,' Alphabet CEO Sundar Pichai said. Alphabet doesn't issue formal guidance like some companies do, but Chief Business Officer Philipp Schindler said on a conference call with investors that the company could be impacted by new tariff policies that might hurt ad spending by Asian retailers. The Trump administration is eliminating the de minimis exemption for products from China that allowed companies to avoid taxes on goods shipped to the U.S. valued at less than $800. 'I mean we're obviously not immune to the macro environment,' Schindler said. 'But we wouldn't want to speculate about potential impacts beyond noting that the changes to the de minimis exemption will obviously cause a slight headwind to our ads business in 2025 primarily from APAC-based retailers.' Alphabet also reaffirmed that it plans to spend about $75 billion on capital expenditures this year as it races to build out its AI capabilities. Alphabet's results show the company's continued strength even as it faces challenges on several fronts. Google has been found to hold illegal monopolies in online search and some ad technology by two different federal judges in recent months. A three-week hearing is currently underway to determine how to restore competition to the online search market, which could see the forced sale of Google's Chrome browser, as well as other remedies. Need an advisor? Need expert guidance when it comes to managing your investments or planning for retirement? Bankrate's AdvisorMatch can connect you to a CFP® professional to help you achieve your financial goals. The rulings come as Google's search business is under threat from new AI products that increasingly give consumers answers to questions, rather than a list of links to find answers. The company has made changes to its search results, offering more direct answers to queries in the form of AI Overviews, but investors have been skeptical that approach will be as profitable as the traditional search business. The company said that the first quarter saw its largest expansion of AI Overviews, with the feature now available in 15 languages across 140 countries, and — critically for investors — it sees monetization at 'approximately the same rate.' Alphabet's stock has fallen about 20 percent from its all-time high and trades at the lowest earnings multiple of any company in the Magnificent Seven. But low expectations can sometimes be a good thing for investors. 'While we believe investor concerns around a tariff-induced digital ad spending slowdown and antitrust-related impact on Alphabet's business are valid, we think the selloff in the firm's shares has been overly punitive, creating an attractive buying opportunity,' Malik Ahmed Khan, an equity analyst at Morningstar, wrote in a note to clients. Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation. Sign in to access your portfolio
Yahoo
26-04-2025
- Business
- Yahoo
Google's ad business remains robust despite macro, regulatory threats
This story was originally published on Marketing Dive. To receive daily news and insights, subscribe to our free daily Marketing Dive newsletter. Google topped revenue expectations in Q1, with its ad business raking in $66.89 billion, according to an earnings statement from parent Alphabet. However, executives warned of mild headwinds gathering due to macroeconomic volatility. Search, Google's largest ad segment, grew revenue 9.8% year over year to $50.7 billion, led by spending from financial services brands followed by retailers. YouTube was up 10.3% to $8.9 billion for the period, driven by demand for direct response and brand ads. Despite the strong start to the year, Google is contending with the dual threats of macroeconomic uncertainty, which could dent ad spending, and an antitrust crackdown focused on its search and ad-tech offerings. Google's Q1 revenue overall totaled $90.2 billion, up 12%, delivering a stronger-than-expected quarter that saw the company bounce back from a holiday period in which its core advertising engines experienced a rare slowdown. The momentum at the beginning of the year may be challenged as the company contends with potentially weaker appetites for ad spending from marketers that are embroiled in tariff chaos. Whether Google will need to break off important aspects of its business, including its Chrome web browser and valuable ad-tech assets, remains an open question as well. Digital platforms like Google and Meta have in recent years benefited from a surge in advertising activity from Asia-Pacific (APAC) retailers, including Temu and Shein, that have found favor with U.S. shoppers on the hunt for cheap goods. But recent analysis has suggested that those companies have pulled back due to tariffs, including on channels like paid search that represent Google's bread and butter. Analysts at MoffettNathanson believe Meta, the owner of Facebook and Instagram, stands to lose up to $7 billion in advertising revenue this year due to the Trump administration's tariffs. Meta reports its Q1 earnings on April 30. Google executives emphasized that it is too early to say what the true impact of the macroeconomic volatility will be, but acknowledged that there could be some weakness in what was until recently a robust spending category. 'I mean, we're obviously not immune to the macro environment, but we wouldn't want to speculate about potential impacts beyond noting that the changes to the de minimis exemption will obviously cause slight headwind to our ads business in 2025, primarily from APAC-based retailers,' said Chief Business Officer Philipp Schindler on a call discussing the Q1 results with analysts. Schindler added that Google is well-versed in navigating periods of uncertainty. Beyond macro factors, Google is also contending with a mounting number of regulatory threats. The search giant late last week was ruled to wield an illegal monopoly on ad-tech publisher tools and ad exchanges — though not display advertising — with remedies still being sorted out. Last year, the company was found to have a monopoly on the search market, with proposed remedies including a spinoff of Chrome. While these changes would be disruptive, not all analysts are convinced they would bring down the top dog in digital advertising. 'Google's results reinforce the view that, even in the event Google were forced to divest the business units targeted by antitrust advocates, the direct financial impact would be minimal relative to the strength of its core businesses,' said Andrew Frank, vice president distinguished analyst at Gartner, in emailed comments on the earnings report. 'Although the structural impacts are harder to assess, the performance should give Google's business customers some reassurance regarding Google's durability.' Google has made other moves of late that carry weighty implications for advertisers. This week, it announced it would keep third-party cookies in Chrome rather than create a standalone device for opting in or out of using the controversial tracking technology. The news puts a nail in the coffin of a yearslong saga that set off a mad scramble for alternatives and left many marketers in a holding pattern. Google did not discuss cookies or Chrome on the Q1 earnings call. 'The earnings news effectively turns the page,' said Frank of cookie deprecation. Recommended Reading What's next as Google keeps cookies amid challenges to its dominance
