Alphabet stock drops after earnings show disappointing Google sales growth

Alphabet’s profit expectations may have fallen short on Tuesday. But it’s stock still initially rising 3% . It does mean a thing , let us find out ? Alphabet reported first-quarter earnings of $6.84 billion, or $9.87 a share, compared with $6.66 billion, or $9.50 a share, in the year-ago period, Revenue after removing traffic-acquisition costs grew to $33.7 billion from $29.48 billion in the year-ago period. Alphabet’s overall revenue, made up mostly of Google’s advertising business, was a little higher than investors had forecast. That’s despite advertisers on its websites – which tend to be from “consumer cyclical” sectors like travel, autos, and retail – having yanked much of their ad spending in March. Not that it was much of a surprise,. So even though user engagement on platforms like YouTube likely increased thanks to a homebound audience, travel firms like Booking.com – which normally spends $4 billion a year with Google – have, for obvious reasons, paused ads altogether Alphabet’s own costs, however,  meaning its quarterly profit came in lower than hoped. 
Analysts expect Alphabet’s ad revenue to have accelerated by next year, once the global economy reopens and companies start vying for consumers’ attention again. Longer-term investors think Alphabet’s non-ad businesses like Google Cloud – as well as other ventures like Waymo, DeepMind, and Verily – might now come to the fore. Very little of the potential value of those segments is currently reflected in Alphabet’s share price, so if new investors decide to take advantage of that oversight by buying up Alphabet’s shares, existing investors could be in for a windfall.

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