Alphabet becomes sole winner of hyperscaler earnings sweepstakes

Clay Webster FXStreet

Alphabet (GOOGL) was the sole Magnificent 7 stock to rally on earnings afterhours on Wednesday. The big day for earnings saw the other three — Meta Platforms (META), Amazon (AMZN) and Microsoft (MSFT) — sell off despite major beats.

All four stocks beat consensus earnings and revenue targets from Wall Street analysts, but only Alphabet turned a beat on the fundamentals into a win for the market.

GOOGL shares gained 5.8% afterhours, rising from the regular session close just below $350 to $370 in the post-market rally. Meanwhile, Meta Platforms sank over 6%, while Microsoft and Amazon each sold off circa 2%.

Alphabet outshines other hyperscalers

Alphabet blew away the competition, earning $5.11 in GAAP earnings per share (EPS) compared with the $2.67 average analyst estimate. For revenue in the first quarter, Alphabet reported $109.9 billion, beating consensus by about $3 billion.

Net income in the quarter rose so spectacularly, up over 80% YoY, primarily due to unrealized gains on nonmarketable equity securities, nearly tripling in value over the past year to almost $37 billion.

"Our AI investments and full-stack approach are lighting up every part of the business," CEO Sundar Pichai said in a statement. "This was our strongest quarter ever for our consumer AI plans, driven by the Gemini App."

Google Cloud outshone Alphabet's other segments, rising 63% from a year earlier to $20 billion in revenue. Search rose 19% to $60.4 billion in revenue. YouTube ad revenue increased 11% YoY to nearly $10 billion. Subscription, platforms and devices saw revenue rise 19% YoY to $12.4 billion. Other Bets and Google Network both saw slight revenue declines.

Alphabet GOOGL 1-hour chart — GOOGL 1-hour chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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