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Author: Alan LittleDate: 2022-02-03

Google parent Alphabet (GOOGL) +7% on Q4 beats, 20-for-1 stock split

Google parent Alphabet (GOOGL) was on track for share gains on Wednesday after posting a strong Q4 report and announcing a 20-for-1 stock split.

Strong growth in ad and search revenue helped Google parent Alphabet (GOOGL) to crush Q4 earnings expectations and send its shares 7% higher on Wednesday.

Late on Tuesday, Alphabet had no problem in flying past pre-report forecasts, which now look conservative in comparison to the $75.3bn revenues and $30.69 earnings per share it generated in Q4.

Wall Street had the company pegged at $72.3bn and $27.48 per share, but Alphabet’s strength in advertising, search and the cloud helped it perform well above the consensus.

CEO Sundar Pichai said: “Our deep investment in AI technologies continues to drive extraordinary and helpful experiences for people and businesses, across our most important products.”

Perhaps more surprising for investors than the blockbuster report was the announcement of a 20-for-1 stock split.

This will see shareholders receive 19 additional shares for each share they own if the move is approved by July.

Reacting to the stock split, Aptus Capital Advisors analyst David Wagner believes that it is big news considering how favourably the market responded to similar splits by Tesla (TSLA) and Nvidia (NVDA).

The strength of the quarterly numbers could also set the scene for share gains for GOOGL in the coming days.

Alphabet saw impressive growth across a range of key segments, including Cloud revenues, which jumped 44.7% to $5.54bn, and YouTube ads revenue, which climbed 25.4% to $8.63bn.

Wagner was already bullish heading into the report, noting that Alphabet is on track to deliver 20% growth in earnings through to 2027 thanks to its excellent position in advertising, mobile search, the cloud, and more.

Alphabet shares traded higher on Wednesday, with the 7.52% advance setting a new price of $2,960.

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